This review paper presents an overview of the state of the art on process-induced degradation of poly(lactic acid) (PLA) and the relative importance of different processing variables. The sensitivity of PLA to degradation, especially during melt processing, is considered a significant challenge as it may result in deterioration of its properties. The focus of this review is on degradation during melt processing techniques such as injection molding and extrusion, and therefore it does not deal with biodegradation. Firstly, the general processing and fundamental variables that determine the degradation are discussed. Secondly, the material properties (for example rheological, thermal, and mechanical) are presented that can be used to monitor and quantify the degradation. Thirdly, the effects of different processing variables on the extent of degradation are reviewed. Fourthly, additives are discussed for melt stabilization of PLA. Although current literature reports the degradation reactions and clearly indicates the effect of degradation on PLA’s properties, there are still knowledge gaps in how to select and predict the processing conditions that minimize process-induced degradation to save raw materials and time during production.