Abstract: Prefabrication has been considered an effective alternative to conventional building. It has gained an increasing amount of attention over the last few decades towards achieving sustainable goal. To develop prefabricated housing and address challenges in construction industry, the Indian government is encouraging prefabricated construction system. A critical review was conducted to identify the potential usage of prefabrication construction system compared to conventional construction methods. Through a comprehensive review of relevant literatures it was observed that, prefabricated construction system has become increasingly popular and widely promoted due to its potential to improve the construction environment, quality and productivity.