The socket is the most critical part of every lower-limb prosthetic system, since it serves as the interfacial component that connects the residual limb with the artificial system. However, many amputees abandon their socket prostheses due to the high-level of discomfort caused by the poor interaction between the socket and residual limb. In general, socket prosthesis performance is determined by three main factors, namely, residual limb-socket interfacial stress, volume fluctuation of the residual limb, and temperature. This review paper summarizes the various sensing and actuation solutions that have been proposed for improving socket performance and for realizing next-generation socket prostheses. The working principles of different sensors and how they have been tested or used for monitoring the socket interface are discussed. Furthermore, various actuation methods that have been proposed for actively modifying and improving the socket interface are also reviewed. Through the continued development and integration of these sensing and actuation technologies, the long-term vision is to realize prostheses. Such smart socket systems will not only function as a socket prosthesis but will also be able to sense parameters that cause amputee discomfort and self-adjust to optimize its fit, function, and performance.