AbstractHydraulic fluid power systems are essential for a range of engineering applications such as transportation, heavy industry, and robotics. The scale of the industry is such that hydraulic pumps are estimated to account for 15% of all the energy consumption in the European Union and yet the average efficiency of fluid power systems is only 22%. The digitalization of hydraulic systems offers significant advantages in terms of energy efficiency, performance, reduced maintenance, and automation. However, this requires advances in the integration of smart sensing technologies to provide real‐time feedback on the operation and health of hydraulic components. This review details developing trends in hydraulic fluid power research and provides an overview of progress related to the digitalization of these systems and their integration within an Industry 4.0 framework. The fundamentals of relevant sensor technologies and innovative approaches for integrating sensors into hydraulics systems are discussed. Methods to deliver power to the sensors and associated electronics through harvested pressure ripples are also reviewed. An outlook with respect to future directions in this field is given, including an assessment of the potential for exploiting advanced manufacturing technologies, in particular additive manufacturing, to facilitate successful sensor integration into hydraulic fluid power systems.