Direct alcohol fuel cells (DAFCs) have been attracting more and more attention and interest during the last decade due to their simplicity, the easy handle and the high power density of the liquid alcohol fuels. However, along with DAFCs’ development several problems related to their performance optimizations have arisen that are well established and researches are already in progress for their solutions. These problems are responsible for the short lifetime and low cell performance and can be summarized as follows: (a) low alcohol electro-oxidation kinetics, (b) alcohol crossover, and (c) electrode delamination. This article briefly reviews DAFCs’ state of the art, the pertinent work done for the localization and quantification of the above-mentioned problems and the work aiming at the identification and use of novel materials which could catalyze the rate-determining step for the DAFCs’ development and further commercialization. Furthermore, taking into account that fuel choice is still a disputed issue, the alcohols suitable as potential fuels for DAFCs are also summarized and compared.