Globally, around half (55%) of the population live in fast-paced urban settings where many people find it challenging to manage their stress and respond to crises with a positive mindset. This resulted in prolonged distress where anxiety and fatigue caused physical and mental health concerns. Nature walks involving immersive exposure in the forest, and green spaces have been posited to offer physiological and psychological benefits. Therefore, in this systematic review, we evaluated the effects of forest bathing on psychological and physiological outcomes. We searched four English and five non-English databases (Chinese and Korean) for peer-reviewed studies published between January 2000 and March 2021. This review adhered to the recommendations of the Preferred Reporting Items for Systematic Reviews and Meta-analysis Statement 2020. The primary outcomes explored in this review were mainly psychological, including anxiety, depression, mood and quality of life. The secondary outcomes were physiological outcomes such as blood pressure and heart rate. We conducted a meta-analysis on each outcome using the random-effects model. Heterogeneity was assessed by the I statistic. Thirty-six articles (21 in English, 3 in Chinese and 12 in Korean) with 3554 participants were included in this review. Our meta-analysis suggested that forest bathing can significantly reduce symptoms of depression and anxiety. However, we did not observe as many benefits in physiological outcomes. Against the background of the negative effects of urbanization on mental well-being, this review highlighted the potential therapeutic role of forests in the contemporary world, lending further evidence-based support for forest conservation.