Managing unilateral maxillary lateral incisor agenesis (UMLIA) with an associated microdontic or peg-shaped contralateral incisor (Mi or Peg MLI) presents clinical and esthetic challenges. Deciding between orthodontic space opening (OSO) or closure (OSC) and whether to restore or extract the Mi or Peg MLI are critical factors for achieving optimal treatment outcomes. A systematic review was conducted using a dual strategy across Scopus, Web of Science, Embase, PubMed, and Cochrane Central Register of Controlled Trials databases. The Cochrane RoB2 tool was used for randomized controlled trials (RCTs), the ACROBAT-NRSI tool for non-randomized studies, and the JBI Manual for case reports. High-quality case reports were included when the literature was limited. The GRADE (Grading of Recommendations, Assessment, Development, and Evaluation) tool evaluated the certainty of evidence, considering bias, inconsistency, indirectness, imprecision and other considerations. Thirty-five studies met the inclusion criteria, assessing treatment modalities, esthetic outcomes, periodontal health, and occlusal and temporomandibular joint (TMJ) function. Both OSO and OSC demonstrated similar occlusal and TMJ outcomes, while slight differences in esthetic and periodontal results were noted between the two approaches. Direct composite and indirect ceramic restorations showed comparable effectiveness for reshaping the Mi or Peg MLI. Extraction combined with OSC contributed to improved smile symmetry. A personalized, multidisciplinary approach is essential for treating UMLIA with an Mi or Peg MLI. Both OSO and OSC are viable options, and the choice should be tailored to the patient's specific clinical scenario, with attention to achieving the best esthetic and periodontal outcomes. Further research is needed to refine treatment protocols and support clinical decision-making.