The problem of forming machine cells and part families is the most important among the strategic issues in cellular manufacturing. This problem has been addressed by several researchers and every practitioner in this field. While researchers have developed several mathematical models that provide optimal and heuristic solutions to this "hard" and difficult problem, practitioners believe that simple rules and experience can create effective cells. This chapter traces the progress of algorithms for cell formation that uses mathematical programming and network models over the last four decades. © 2018 by Nova Science Publishers, Inc. All rights reserved.