The drastic change in climatic conditions has led to shift towards the review of sustainable strategies in the renewable energy sector. Hydrokinetic technology has various benefits over the conventional methods, which can be helpful in achieving the desired sustainable development. In the present study, an outline for the conversion of hydrokinetic energy along with its challenges has been discussed. The study comprises of three steps involving collection of properties required for site characterization followed by selection of the suitable hydrokinetic device as per the site characteristics and the determination of impact on the flow condition due to device installation. The characteristics of the site govern the selection of the device, its mooring arrangements, and augmentation. The arrangement of devices as a single unit or in an array will have an impact on the flow conditions. The altered flow condition will in turn affect and change the characteristics of the site. This three-step process is interlinked and will have a cumulative impact on the environment. The influence of environmental impact and cost of energy, which are the two major factors for the success of this technology, are also discussed. Further, various challenges faced by hydrokinetic technology in its development are explored. It is concluded that only the optimization of a hydrokinetic device for its efficiency improvement will not be fruitful until its impact on flow condition is considered for optimization.