Information and communication technology has changed the dynamics of human life and society. The open source software is currently one of the options preferred by libraries. Software now-a-days has became the life line of modern day organization. They cannot carry on their tasks with effectively, efficiently and promptly without software. There are a number of open source software’s available for automation of libraries and creation of digital libraries. This paper discusses the meaning, important issues, reasons why libraries prefer open source software, an overview of different types of open source software like Koha, Greenstone, Newgenlib, Invenio, Fedora, E-prints etc. at length.