Testing is a crucial step in designing and implementing software in the distributed environment. Testing in the distributed applications is not only difficult, but also a costly method. This Research briefly discusses the performance testing in the distributed software environment along with different other testing techniques proposed in the literature that correspond to distributed applications. Additionally, we discuss the key testing challenges faced during the whole process of testing the distributed applications. Much of the focus of this paper is on intelligent agent-based testing. Agent based testing is provide better coordination mechanism between multiple testers and exert more controllability and observablility on fault detection. In this study we have critically analyzed testing methodologies being practiced in the distributed environment. We have studied the merits and limitations of these methodologies proposed in the contemporary literature and have identified the possible improvements in those methodologies to make them more robust.