This review presents the results of research in the field of photocatalytic reduction of carbon dioxide (CO2) to methane and methanol as valuable chemicals and fuels. CO2 reduction is a promising technology, but it is an endothermic process with unfavourable thermodynamics. Other limitations include the inertness of the CO2 molecule, the slow multielectron process, and the lack of understanding of the reaction mechanism, leading to low selectivity and insufficient efficiency. Tailoring reaction parameters such as CO2 adsorption, choice of reducing agent, development of photocatalysts in terms of composition, structural properties and morphology, energy band gap, and the presence of surface functional groups can affect the reaction mechanism and selectivity for the desired product. Therefore, the main challenges in this research area are the development of an active and selective catalyst for the photoreduction of CO2 to useful products with high added value and the optimization and development of a suitable photoreactor that allows successful contact between all key participants in the photocatalytic process. This review is intended to provide guidance for the future development of advanced photocatalysts and photocatalytic systems for CO2 reduction and to enable further breakthroughs in this field.