Labyrinth seals have been used in the aerospace industry for decades, for their robust design and non-contact nature. The present needs of the aerospace industry wherein drastic change in engine operating conditions for more power and efficiency have put the labyrinth seal in challenging situations. As the high pressure and temperature in the engine induce fluid–structure interaction, there is an urgent need to quantify the effect. There is an urgent need to find ways to reduce the impacts of fluid and thermal effect so that the fluid–structure interaction effects that hamper the operating hours of the labyrinth seal can be studied in detail. Few studies have been able to shed light on the rotor dynamic and fluid effect, but there remains less correlation between teeth change and change in fluid–structure interaction. The present review work will shed light on the importance of fluid and thermal impact that forms the basis of the fluid–structure interaction on the labyrinth seal that affect the operating hours of the seal.