The rise of cloud computing is radically changing the way enterprises manage their information technology assets. Considering the benefits of cloud computing to the information technology sector, we present a review of current research initiatives and applications of the cloud computing paradigm related to product design and manufacturing. In particular, we focus on exploring the potential of utilizing cloud computing for selected aspects of collaborative design, distributed manufacturing, collective innovation, data mining, semantic web technology, and virtualization. In addition, we propose to expand the paradigm of cloud computing to the field of computer-aided design (CAD) and manufacturing and propose a new concept of cloud-based design and manufacturing (CBDM). Specifically, we (1) propose a comprehensive definition of CBDM; (2) discuss its key characteristics; (3) relate current research in design and manufacture to CBDM; and (4) identify key research issues and future trends.