Eclipse doesn't highlight references anymore

There's a little "highlighter" icon on the toolbar - it toggles "Mark Occurrences".

From the preferences window, the feature you mean is configured by navigating to:

Window -> Preferences -> Java -> Editor -> Mark Occurrences

There's a little "highlighter" icon on the toolbar - it toggles "Mark Occurrences".

You probably accidentally pressed it when trying to select a menu item at some point. I had a friend who did that with the "show selected element only" toolbar button...

You can either press it again or configure as Rytmis says.

Press alt-shift-O.

It toggles the "Mark Occurrences" feature of Eclipse; which provides the highlighting functionality you're missing.