Compacted (vermicular) graphite iron is a type of cast iron in which the majority of the carbon is present in the form of compacted graphite particles. These particles are placed in a metal matrix which consists mainly of ferrite, ferrite and pearlite, or pearlite. According to its physical and mechanical properties, compacted graphite iron can be placed between gray and ductile iron. Production of compacted graphite iron is more complicated than the production of gray and ductile iron because numerous process parameters influencing the formation of compacted graphite during solidification. Already very small deviations from their optimal values may result in the formation of flake or nodular graphite. Compacted graphite iron has long been known. However, the difficult process of production has limited its significant application in the past. Increase of knowledge about compacted graphite iron, progress of foundry technology and production process control has enabled its wider application. Today, compacted graphite iron is used for numerous applications. It is mainly used in in the motor vehicle industry for components which at the same time must have a resistance to thermal loads and strength. This review paper shows the standard for compacted graphite iron, the factors that affect its properties, production of compacted graphite iron and its properties and application.