Research on service innovation suggests that involving customers in the development of new services is a major contributing factor to the success of new services (e.g. Carbonell et al., 2009; 2012; Melton & Hartline, 2010; 2015; Zhihong et al., 2015). The purpose of this study is to provide an overview of the literature on customer involvement (CI) in new service development (NSD) both offline and online and to identify the major current issues faced by researchers and future research challenges. This paper approaches CI from the perspective of “co-creation for others” (Witell et al., 2011), that is participating in developing services that can benefit other customers. A search was done on three major databases, EBSCO; Emerald, and ScienceDirect, using various keywords (CI; NSD; service innovation; user involvement; co-creation, and customer participation) from 2002 (first CI paper published (Carlborg et al., 2014) to 2016. Relevant studies start with mainly qualitative inquiries whereas in the last 5 years there are more surveys and new types of qualitative research such as netnography and action research. The most important questions addressed are who is involved and how. Various studies investigate the role of different types of customers such as close; lead; ordinary or guided; their characteristics such as proactiveness; knowledge or experience; motives; emotions, or dissatisfaction, and their capabilities such as knowledge absorptive capability or relational capability. Furthermore, the way customers may be involved is analysed from many perspectives including the stages of involvement; the modes and intensity of involvement in each NSD stage (e.g. Melton and Hartline, 2010; Paasi, 2014) as well as the characteristics of effective CI. Moreover, studies in the online environment look at the web based tools for CI such as social media or virtual communities (Ryzhkova, 2012); the nature of customer contributions on social networks (Sigala, 2012); the role of lead users in developing online services (Schuhmacher & Kuester, 2012; Mahr & Lievens, 2012) and the drivers of customer participation in virtual brand communities (Zhilong et al., 2015). Major current issues include which customer or firm actions should be included in each stage and why; what is the role of relationships in effective CI; how we can select customers for NSD and what is the role of virtual environments in CI. Future research challenges include developing guides for customer selection for NSD; analyzing the nature of CI (modes; intensity; types of contributions; customer roles and actions in each stage; communication types and skills); using virtual environments for CI and determining the link of various relationship concepts with CI.