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Summary To promote the sustainable development of the iron and steel industry (ISI), evaluation methods and influencing factors of energy efficiency have been studied in the past decades. A systematic review of these methodologies and influencing factors is presented in this paper. Initially, this paper states the development, current situation, and energy consumption of the world's ISI. Then, the definition of energy efficiency is described. After that, the evaluation methods are categorized as single‐factor methods (including these indicators of thermodynamic, thermos‐physical, thermo‐economic, and economic) and multifactor methods (including parametric and nonparametric methods). Furthermore, typical evaluation methods are highlighted. Thermal analysis method and exergy analysis method are routinely combined to optimize the energy utilization. Data envelopment analysis (DEA) and stochastic frontier analysis (SFA) are widely concerned and well developed to gain a better economic benefit. Malmquist index method is often associated with DEA to analyze the technical process and return to scale. Some emerging methods are proposed, for example, the three‐stage DEA method together with DEA and SFA. Finally, the influencing factors of energy efficiency in the ISI are discussed, including industrial structure, technological level, energy consumption structure, price, and so on. It is suggested that optimizing energy structure and improving technology level are effective measures to improve the energy efficiency in the ISI.

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