Abstract The steam assisted gravity drainage (SAGD) process has emerged as an effective technology for the recovery of oil from oil sands deposits that are deeply buried for surface mining. In general, the process involves drilling paired horizontal wells, one well above the other and separated by a distance, near the bottom of the oil-bearing formation. The top well is used to inject steam into the oil sands, heating up the oil and allowing it to drain, under the action of gravity, into the bottom well. The paper first provides a review of the technological advances made in SAGD operating strategies. In addition to the successful field testing at the Underground Test Facility (UTF), the SAGD process has been recently extended to other types of reservoirs. These include reservoirs with lower permeability as compared to that at the UTF site and reservoirs with bottom water transition zones. Challenges facing application of the process in such types of reservoirs will be discussed. Concepts to overcome the challenges will be presented in terms of laboratory studies that have been carried out. The concepts tested include: the use of mechanical means such as drilling vertical drainage channels between paired horizontal wells; combining a vertical well with paired horizontal wells and potential for solvent and gaseous additives in steam (to improve SOR and reduce water requirements). Results provide valuable observations for field scale development of a more robust and economically viable process.