Acicular ferrite is a microstructure nucleating intergranularly on non-metallic inclusions and forming an arrangement of fine, interlocking grains. This structure is known to improve steel properties, especially steel toughness, essentially. The formation of acicular ferrite is mainly affected by steel composition, cooling rate, inclusion landscape and austenite grain size. In recent decades, extensive research has been conducted to investigate these factors. The present paper provides an overview of the impact of published results and the state of knowledge regarding acicular ferrite formation. Special attention is paid to the effect of carbon, manganese and titanium addition to steel, as well as the optimum size, number and composition of non-metallic inclusions. In addition, the reactions during the nucleation and growth of acicular ferrite needles are briefly addressed. Further, characteristics of acicular ferrite and bainite are summarized, which should help to distinguish these similar structures.