Moisture-induced damage is among the four prevalent causes of premature failure of flexible pavements in Canada. Research on moisture damage evaluation of asphalt concrete mixtures dates back to approximately one century ago. However, relating the field performance of mixes to their associated properties, capture through laboratory test methods, is not fully developed yet. Several test methods have been utilized over the last few decades to assess the moisture-induced damage of mixes in the laboratory scale. Studying the Tensile Strength Ratio (TSR) or loss of indirect tensile strength (ITS) due to moisture conditioning of specimens with or without freeze-thaw cycles has been the most commonly used method in North America. Review of case studies indicates major shortcomings of this technique. For instance, in many cases a mix may pass the minimum TSR requirements in the laboratory, but would fail in the field and vice-versa. Therefore, many transportation agencies have been recently investing in finding alternative test methods such as Hamburg wheel-tracking test (HWTT) and Moisture Induced stress tester (MiST) to better predict the moisture-related performance of flexible pavements. This study, provides a critical review of the existing methods for evaluation of moisture damage in asphalt mixtures along with their strengths and weaknesses for this purpose. The major parameters that contribute to this complex phenomenon are also discussed. A synthesis of the state of practice for design specifications and materials acceptance with respect to moisture damage by different agencies is also provided. Finally, the need to use domestically calibrated moisture conditioning and evaluation practices and establishing customized acceptance thresholds that suit the climatic conditions in Canadian environment is highlighted. Recommendations are provided for an improved moisture damage assessment framework, based on the lessons learned from the past experiences as well as the identified promising techniques.