Purpose The purpose of this review paper is to address the substantial challenges of the outdated exoskeletons used for rehabilitation and further study the current advancements in this field. The shortcomings and technological developments in sensing the input signals to enable the desired motions, actuation, control and training methods are explained for further improvements in exoskeleton research. Design/methodology/approach Search platforms such as Web of Science, IEEE, Scopus and PubMed were used to collect the literature. The total number of recent articles referred to in this review paper with relevant keywords is filtered to 143. Findings Exoskeletons are getting smarter often with the integration of various modern tools to enhance the effectiveness of rehabilitation. The recent applications of bio signal sensing for rehabilitation to perform user-desired actions promote the development of independent exoskeleton systems. The modern concepts of artificial intelligence and machine learning enable the implementation of brain–computer interfacing (BCI) and hybrid BCIs in exoskeletons. Likewise, novel actuation techniques are necessary to overcome the significant challenges seen in conventional exoskeletons, such as the high-power requirements, poor back drivability, bulkiness and low energy efficiency. Implementation of suitable controller algorithms facilitates the instantaneous correction of actuation signals for all joints to obtain the desired motion. Furthermore, applying the traditional rehabilitation training methods is monotonous and exhausting for the user and the trainer. The incorporation of games, virtual reality (VR) and augmented reality (AR) technologies in exoskeletons has made rehabilitation training far more effective in recent times. The combination of electroencephalogram and electromyography-based hybrid BCI is desirable for signal sensing and controlling the exoskeletons based on user intentions. The challenges faced with actuation can be resolved by developing advanced power sources with minimal size and weight, easy portability, lower cost and good energy storage capacity. Implementation of novel smart materials enables a colossal scope for actuation in future exoskeleton developments. Improved versions of sliding mode control reported in the literature are suitable for robust control of nonlinear exoskeleton models. Optimizing the controller parameters with the help of evolutionary algorithms is also an effective method for exoskeleton control. The experiments using VR/AR and games for rehabilitation training yielded promising results as the performance of patients improved substantially. Research limitations/implications Robotic exoskeleton-based rehabilitation will help to reduce the fatigue of physiotherapists. Repeated and intention-based exercise will improve the recovery of the affected part at a faster pace. Improved rehabilitation training methods like VR/AR-based technologies help in motivating the subject. Originality/value The paper describes the recent methods for signal sensing, actuation, control and rehabilitation training approaches used in developing exoskeletons. All these areas are key elements in an exoskeleton where the review papers are published very limitedly. Therefore, this paper will stand as a guide for the researchers working in this domain.