Physical Surroundings have been identified by a number of researchers as a powerful tool that can manipulate people's mood and cognition. A number of marketing practitioners have accepted this notion, given that physical surroundings are increasingly used as atmospheric stimuli in various retail environment as well as in restaurant. Yet there have not been practical reviews on consumer responses in restaurant setting/environment. By means of a literature review, this study examines how physical surroundings in restaurant settings function on displaying dinning atmosphere. It includes the conceptual definition and classifications of physical surroundings, effect of physical surroundings on customers' internal responses and behaviors, and testable research propositions and directions for future researches. This study is expected to make a substantial contribution to the understanding of restaurant manager and dinning atmosphere displayer about function of physical surroundings in dinning context.