Vaccine hesitancy plays a crucial role in worldwide pandemic-control efforts. The multifaceted nature of vaccine hesitancy entails many psychological factors that are widely discussed in the literature, although few studies specifically compile these factors. Thus, this systematic review aims to synthesize the psychological factors contributing to vaccine hesitancy. As per the PRISMA (preferred reporting items for systematic reviews and meta-analyses) guidelines, a systematic search was conducted on electronic databases PubMed, Scopus, Science Direct, PsycNET, and Web of Science, and a manual search was conducted on Google Scholar. Out of the 2289 articles obtained, 79 studies that met the inclusion criteria were deemed eligible for the review. The findings highlight appraisals of the COVID-19 pandemic, vaccine safety and side effects, vaccine confidence/trust, trust in government and healthcare professionals, scepticism around vaccine production, conspiracy beliefs, emotions, and information and knowledge about the vaccine as the major psychological factors contributing to vaccine hesitancy. Concerningly, misinformation on COVID-19 vaccination spread through social media platforms, increasing vaccine hesitancy. Recommendations for government authorities, healthcare professionals, and implications for future research are also outlined.