The manufacturing industry is adopting new technologies such as IoT to improve its manufacturing processes. However, the understanding of IoT implementation in Industry 4.0 is limited, especially in Malaysia. To fill this gap, this study aims to identify the IoT implementation framework in Industry 4.0 manufacturing and the associated challenges. The study employed a systematic review of 42 articles published between 2011 and 2022. The results indicate that Industry 4.0 has revolutionized the manufacturing industry, and Malaysian companies need to embrace this digital transition to remain competitive. The study recommends that Malaysian manufacturing companies should invest in IoT development and employee training to optimize IoT usage. Furthermore, the government needs to create awareness about IoT implementation to boost Malaysia’s economy. This study contributes to the development of guidelines and standards for companies that want to implement IoT.