The principle of the air-lift reactor is finding wide application in the fields of both chemical technology and biotechnology because it offers simple and effective mixing in three-phase processes involving gases, liquids and solids. The air-lift principle offers advantages of no moving parts, high gas absorption efficiency, good heat transfer characteristics and rapid mixing which are applicable in a range of industrial processes. This review considers specific aspects of air-lift reactors emphasizing their function and relevance to particular applications. The two main groups of air-lift reactor, baffled vessels and external loop reactors, have four main component parts in common, the riser, the downcomer, the base and the gas separator, all of which have distinct characteristics. The performance of these four components with respect to flow configurations, fluidization of suspended solids and mass transfer are discussed together with methods of evaluating mass transfer coefficients.