Plasma electrolytic polishing (PeP) is an innovative technology used to obtain metal surfaces with low roughness and a high gloss. Its advantages, which include high efficiency, no structural selectivity, and low pollution, have recently attracted much attention. PeP is widely used in aerospace, biomedical, precision instrumentation, and 3C electronics industries. This paper primarily aims to introduce basic principles of PeP technology from both the macro- and micro-mechanism viewpoints. Accordingly, the typical characteristics and phenomena of the polishing process are summarized. The primary control parameters which affect the surface quality and material removal rate are discussed in detail. These include treatment time, electrolyte, electrical source, and voltage. Furthermore, the electrolyte jet polishing methods applicable to parts with various geometries are also analyzed. Finally, the PeP surface treatment of selected difficult-to-finish materials is reviewed, followed by the authors’ insights into the prospects of PeP technology. This review can serve as a suitable and effective guide for researchers to understand the PeP technology systematically.