Heat pump (HP) is one of the most energy efficient tools for address heating and possibly cooling needs in buildings. Growing environmental concerns over conventional HP refrigerants, chlorofluorocarbons (CFCs), and hydrofluorocarbons (HFCs) have forced legislators and researchers to look for alternatives. As such, carbon dioxide (R744/CO2) has come to light due to its low global warming potential (GWP) and zero ozone depleting characteristics. Even though CO2 is environmentally benign, the performance of CO2 HP has been of concern since its inception. To improve the performance of CO2 HP, research has been playing a pivotal role in developing functional designs of heat exchangers, expansion devices, and compressors to suit the CO2 transcritical cycle. Different CO2 HP cycles coupled with auxiliary components, hybrid systems, and refrigerant mixtures along with advanced control strategies have been applied and tested. This paper presents a complete overview of the most recent developments of transcritical CO2 HPs, their components, and applications.