Abstract The world's first fuel cell described in the early 1800's was fueled with hydrogen. While hydrogen is still the most common fuel, hydrocarbon fuels offer several advantages including availability at a lower cost, higher storage density and existing infrastructure. This paper provides an overview for the significant potential benefits of using hydrocarbon fuels directly in a fuel cell system. Their use leads to a reduction in the capital cost due to the elimination of the fuel processor unit. The fundamentals, advantages, types of direct hydrocarbon fuel cells (DHFC), challenges and applications are discussed in this paper. The past and current status of research and development activities are addressed with emphasis on efficiency and exergy analyses. In spite of their high theoretical energy efficiency, technical challenges remain unsolved in DHFC systems. In high temperature hydrocarbon fueled operation, the deposition of carbon-based material leads to fuel cell degradation. In lower temperature fuel cells, electrode (mainly the anode) over-potentials and fuel crossover are still challenging. Therefore, the improvement and commercialization of these types of fuel cells will probably require the development of less or non-noble catalysts and reasonably functioning membranes.