This paper reviews technical and clinical impact of the Microsoft Kinect in physical therapy and rehabilitation. It covers the studies on patients with neurological disorders including stroke, Parkinson's, cerebral palsy, and MS as well as the elderly patients. Search results in Pubmed and Google scholar reveal increasing interest in using Kinect in medical application. Relevant papers are reviewed and divided into three groups: (1) papers which evaluated Kinect's accuracy and reliability, (2) papers which used Kinect for a rehabilitation system and provided clinical evaluation involving patients, and (3) papers which proposed a Kinect-based system for rehabilitation but fell short of providing clinical validation. At last, to serve as technical comparison to help future rehabilitation design other sensors similar to Kinect are reviewed.