Ceramic reinforced steel matrix composites are materials for automotive, aerospace, wear and cutting applications. Such metal matrix composites (MMCs) combine attractive physical, mechanical and wear properties with ease of fabrication and low cost. The review focuses on the current state of the art of producing these metal matrix composites, ceramics reinforcements, composition of steel matrix, microstructure evolution and parameters influencing the mechanical and wear properties. Processing methods to fabricate ceramic reinforced steel matrix composites are discussed to produce these composites with low number of defects, homogeneous microstructure and high mechanical and wear performance. The influence of chemical nature of ceramic reinforcements and composition of steel matrix on the microstructure, mechanical and wear properties is presented. The strengthening mechanisms and parameters controlling wear performance of steel MMCs are described as a function of the content of ceramic reinforcements, microstructural design and structure of the steel matrix. Keeping in view the stability of ceramics in steels, suitable ceramic reinforcements and steel matrix materials are discussed. Moreover, the importance of microstructure and interface between ceramic reinforcement and steel matrix in controlling the mechanical properties of steel MMCs is highlighted. The review identifies area of research for development to fully appreciate and tailor the properties of these industrially important composites.