This review presents recent advances in research on fluidized bed combustion of solid biomass. While the main focus is on thermochemical processes occurring in fluidized beds, applicable investigations on biomass combustion from other research areas are also described as they often provide fundamental insight about the processing of biomass, applicable also in the context of fluidized beds. This review aims to summarize lessons learned and indicate some remaining gaps in the existing body of knowledge. The review discusses combustion in separate stages, such as drying, pyrolysis, and homo- and heterogeneous combustion, and characterizes how fluidized beds affect combustion, discussing heat and mass transfer, material segregation, and bed agglomeration. Finally, advances in new research trends and the prospects for technology development are considered, highlighting the chemical-looping technology with its inherent potential for carbon capture, scale-up of advanced computational models, and progress in spectroscopic and tomographic studies applied to combustion.