Increasing greenhouse effect due to the burning of fossil fuels has stirred the attention of researchers towards cleaner and efficient technologies. Direct carbon fuel cell (DCFC) is one such emerging technology that could generate electricity from solid carbon like coal and biogas in a more efficient and environmental-friendly way. The mechanism involves electrochemical oxidation of carbon to produce energy and highly pure carbon dioxide. Due to higher purity, the produced carbon dioxide can be captured easily to avoid its release in the environment. The carbon dioxide is produced in a gaseous state while the fuel used is in a solid state. Due to different phases, all of the fuel can be recovered from the cell and can be reused, ensuring complete (100%) fuel utilization with no fuel losses. Moreover, DCFC operates at a temperature lower than conventional fuel cells. The electric efficiency of a DCFC is around 80% which is nearly double the efficiency of coal thermal plant. In addition, DCFC produces pure carbon dioxide as compared to the thermal power plant which reduces the cost of CO2 separation and dumping. In different types of DCFCs, molten carbon fuel cell is considered to be superior due to its low operating temperature and high efficiency. This paper provides a comprehensive review of the direct carbon fuel cell technology and recent advances in this field. The paper is focused on the fundamentals of fuel cell, history, operating principle, its types, applications, future challenges, and development.