Abstract: Failure of the zirconium alloy claddings due to iodine-induced stress corrosion cracking (I-SCC) will increase the risk of fission product leakage. The progress of I-SCC has been comprehensively investigated in a massive amount of published literature. For a comprehensive understanding of I-SCC, this review focuses on summarizing the mechanisms and influencing factors of I-SCC. Results show that micropits are formed on the surface of zirconium alloys due to the reaction between iodine and zirconium, and then small pits gradually gather to form pit clusters. Cracks are easily generated in pit clusters and propagate along the grain boundary. After reaching a particular condition, the crack will transform into transgranular direction propagation. As the crack develops, it finally becomes a ductile fracture. We also summarize various factors that may affect I-SCC. The specific cracking conditions are linked to elements, such as iodine concentration, temperature, microstructure, and alloying elements. Nonetheless, the improvement of the I-SCC resistance of zirconium alloys needs to be further explored. More attention can be paid to material properties, such as alloying elements, microstructure, and surface treatment, to improve the I-SCC resistance of zirconium alloys.