Industry increasingly moves towards digitally enabled ‘smart factories’ that utilise the internet of things (IoT) to realise intelligent manufacturing concepts like predictive maintenance or extensive machine to machine communication. A core technology to facilitate human integration in such a system is augmented reality (AR), which provides people with an interface to interact with the digital world of a smart factory. While AR is not ready yet for industrial deployment in some areas, it is already used in others. To provide an overview of research activities concerning AR in certain shop floor operations, a total of 96 relevant papers from 2011 to 2018 are reviewed. This paper presents the state of the art, the current challenges, and future directions of manufacturing related AR research through a systematic literature review and a citation network analysis. The results of this review indicate that the context of research concerning AR gets increasingly broader, especially by addressing challenges when implementing AR solutions.