An air compressor is a device which converting mechanical energy into pneumatic energy. There are many types of compressor with different working principles and working condition. The function of all is to draw air from atmosphere and produce higher pressure air for different application. The present paper gives a brief introduction of an air compressor and its application, overhauling, condition monitoring and maintenance program of two stage reciprocating air compressors, a brief introduction to the latest developments of a compressed-air vehicle, development of compressed air engine and power source, effect of temperature on moisture separation in air compressor etc. A case study on compressor of a locomotive for improving performance and development of two stage reciprocating air compressor also studied.