Conventional drug delivery systems are known to provide an immediate release of drug, in which one can not control the release of the drug and can not maintain effective concentration at the target site for longer time. Controlled drug delivery systems offer spatial control over the drug release. Osmotic pumps are most promising systems for controlled drug delivery. These systems are used for both oral administration and implantation. Osmotic pumps consist of an inner core containing drug and osmogens, coated with a semipermeable membrane. As the core absorbs water, it expands in volume, which pushes the drug solution out through the delivery ports. Osmotic pumps release drug at a rate that is independent of the pH and hydrodynamics of the dissolution medium. The historical development of osmotic systems includes development of the Rose-Nelson pump, the Higuchi-Leeper pumps, the Alzet and Osmet systems, the elementary osmotic pump, and the push-pull system. Recent advances include development of the controlled porosity osmotic pump, and systems based on asymmetric membranes. This paper highlights the principle of osmosis, materials used for fabrication of pumps, types of pumps, advantages, disadvantages, and marketed products of this system.