Externally controlled trials have commonly been used when conducting a randomized controlled trial (RCT) is not feasible or ethical. By allowing the study of new treatments, use of external controls can lead to accelerated advances in the management of rare diseases. The use of external controls, however, introduces new challenges due to potential differences between the population the external controls are enrolled from and the population the patients on the new trial are enrolled from. Some differences include, but are not limited to, differences in how patients are diagnosed and treated, differences in the case mix of the underlying populations, differences in the ability to measure outcomes, and differences in data collection. We discuss the potential benefits and challenges of externally controlled trials, as well as strategies to mitigate bias, including the estimand and target-trial emulation framework. We also provide a brief overview of statistical methodology commonly used in these settings. We note that although the strategies presented may help mitigate some of these challenges, they cannot replace an RCT framework, and investigators should be aware of the potential limitations of externally controlled trials.