Biofuels are being promoted as a low-carbon alternative to fossil fuels as they could help to reduce greenhouse gas (GHG) emissions and the related climate change impact from transport. However, there are also concerns that their wider deployment could lead to unintended environmental consequences. Numerous life cycle assessment (LCA) studies have considered the climate change and other environmental impacts of biofuels. However, their findings are often conflicting, with a wide variation in the estimates. Thus, the aim of this paper is to review and analyse the latest available evidence to provide a greater clarity and understanding of the environmental impacts of different liquid biofuels. It is evident from the review that the outcomes of LCA studies are highly situational and dependent on many factors, including the type of feedstock, production routes, data variations and methodological choices. Despite this, the existing evidence suggests that, if no land-use change (LUC) is involved, first-generation biofuels can-on average-have lower GHG emissions than fossil fuels, but the reductions for most feedstocks are insufficient to meet the GHG savings required by the EU Renewable Energy Directive (RED). However, second-generation biofuels have, in general, a greater potential to reduce the emissions, provided there is no LUC. Third-generation biofuels do not represent a feasible option at present state of development as their GHG emissions are higher than those from fossil fuels. As also discussed in the paper, several studies show that reductions in GHG emissions from biofuels are achieved at the expense of other impacts, such as acidification, eutrophication, water footprint and biodiversity loss. The paper also investigates the key methodological aspects and sources of uncertainty in the LCA of biofuels and provides recommendations to address these issues.