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The elevated level of carbon dioxide (CO2) in the troposphere is playing a crucial role in changing the earth's climatic system. Excess CO2 concentration is trapping a substantial proportion of heat imparting adverse range of environmental effects like extreme weather events, agricultural impacts and disruption of the ecosystem. Strategies such as CO2 capturing and storage are being pursued using polyoxometalates (POMs) to mitigate the elevated level of CO2 and their efficient conversion into useful chemicals. This review outlines the importance of CO2 reduction by electrocatalytic and photocatalytic reduction of CO2. POMs have several advantages for CO2 activation because of their promising catalytic activity, high selectivity and versatility for incorporating different metal ions and ligands. The efficient redox active metal center facilitates the conversion of CO2 by providing sufficient activation energy. Their robust structure also enables them resist harsh conditions, including high temperature and acidic or basic conditions. Owing to these properties, POMs can be a catalyst, co‐catalyst, photosensitizer or multielectron donor for CO2 reduction. Finally, we stated the challenges and future insight for CO2 activation using POMs. [ABSTRACT FROM AUTHOR]