Summary Ethanol‐powered spark ignition (SI) engines have the potential to mitigate the twin crisis of fossil fuel depletion and exhaust emissions. However, the successful promotion of ethanol is hindered due to the restriction of fuel blend diversity and design features in the conventional SI engine. The fuel flexibility can be overcome by the use of flex‐fuel engine (FFE) technology with appropriate changes in engine design features for a wide range of ethanol blends. The understanding of FFE based on various technical aspects has greater potential in the automotive sector. Therefore, this review paper provides a holistic approach to critically analyze the various technical aspects of FFE. In this work, the application of ethanol blends on FFE output characteristics is reviewed critically considering the effects of engine operating conditions and parameters. Further, the impact of ethanol blends on material compatibility, cold starting characteristics, and unregulated emissions are analyzed. The outcome of the study shows that combustion and performance characteristics such as cylinder pressure(CP), heat release rate (HRR), and brake thermal efficiency (BTE) are improved in FFE operation due to the clean‐burning characteristics of ethanol blends. Also, carbon monoxide(CO) and hydrocarbon (HC) emissions decreased without any significant improvement in nitrogen oxides (NOx) emissions with a wide range of ethanol shares in FFE. Finally, this study summarizes the present status of research in FFE and creates a route towards the direction of multidisciplinary research need in the future that supports the application of different types of biofuels in FFE.