Trauma remains one of the leading causes of death in adults despite the implementation of preventive measures and innovations in trauma systems. The etiology of coagulopathy in trauma patients is multifactorial and related to the kind of injury and nature of resuscitation. Trauma-induced coagulopathy (TIC) is a biochemical response involving dysregulated coagulation, altered fibrinolysis, systemic endothelial dysfunction, platelet dysfunction, and inflammatory responses due to trauma. The aim of this review is to report the pathophysiology, early diagnosis and treatment of TIC. A literature search was performed using different databases to identify relevant studies in indexed scientific journals. We reviewed the main pathophysiological mechanisms involved in the early development of TIC. Diagnostic methods have also been reported which allow early targeted therapy with pharmaceutical hemostatic agents such as TEG-based goal-directed resuscitation and fibrinolysis management. TIC is a result of a complex interaction between different pathophysiological processes. New evidence in the field of trauma immunology can, in part, help explain the intricacy of the processes that occur after trauma. However, although our knowledge of TIC has grown, improving outcomes for trauma patients, many questions still need to be answered by ongoing studies.