Industrialized Building System (IBS) can be described as a potential prefabrication construction method that uses the best construction machineries, equipment, materials and extensive planning for the construction projects. Utilizing IBS in construction projects may enhance the overall performance at the construction site in terms of safety, quality, cost effectiveness, productivity and reduction of waste. Meanwhile, the level of IBS adoption in Malaysia is still low due to the very challenging barriers faced by the stakeholders in applying the new technology and shortages of skilled manpower. Even though the IBS construction method is not new to the Malaysian industry as it was introduced in the 90 s, its acceptance within the construction industry is still very low due to the high costs involved during its application. In this study, a comprehensive literature review was conducted in order to highlight the importance of adopting IBS in the Malaysian construction industry. The history of IBS, factors of implementation, barriers, benefits, advantages, and disadvantages of IBS were reviewed and analyzed thoroughly. The analysis of the literature review showed that various barriers contributes to the lack of IBS adoption in the Malaysian construction industry such as lack of skilled workers, reliance on the foreign workers, quality of materials, productivity of construction and limited enforcement of IBS requirements. The analysis also revealed that implementation of IBS in Malaysia reduced the reliance of the industry on the foreign labors. Therefore, it is recommended to adopt the IBS in a meaningful way during the pre-designing and planning stages of construction. © 2021, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.