Poly(lactic acid) (PLA) fiber was developed more than a decade ago. It has been regarded as the most promising sustainable and biodegradable fiber to replace conventional polyethylene terephthalate (PET) polyester fiber in textile products. This paper reviews recent developments in PLA polymerization, PLA filament and fiber spinning, staple yarn spinning, fabric production, dyeing and finishing and aftercare procedures. The properties of PLA fiber are broadly similar to those of PET fiber; however, the properties of PLA fiber that differ, including thermal degradation and low hydrolytic resistance to strong alkaline, significantly affect the method selection and parameter setting of production and processing of PLA fibers and fabrics. PLA filaments are mainly produced by two-step melt spinning to get fibers with stable quality, but degradation at high temperature is still a problem. PLA staple yarns are normally spun using ring spinning. Currently existing knitting or weaving techniques can be used to produce PLA fabrics. PLA fabrics can be dyed with disperse dyes at 110°C, but their color fastness and shades are different from PET fabrics when using the same dyes. The scouring and dyeing of PLA/cotton blended fabrics and the reductive clearing after dyeing remain to be improved. As a new fiber, the entry of PLA fiber into the textile market faces difficult challenges as well as great opportunities in the future.