Adolescents are noted to increasingly utilise social media for communication, and therefore, social media is where much of their psychosocial development takes place. The potential impact of social media on psychosocial development is complex and is an emerging field of research. A systematic review was conducted to investigate existing research relating to social media’s effects on psychosocial development. Good practice in systematic review reporting was followed, aligned to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses statement, and a team of five reviewers were involved in each stage of the review process to enhance objectivity and methodological rigour. The review included 20 studies, published between 2008 and 2019. The findings show a complex relationship between social media and adolescent psychosocial development. Social media was found to involve potential risks, in terms of excessive and problematic use, comparison, and cyberbullying. Social support, from both peers and parents, may buffer these negative impacts. Potential benefits of social media use include supporting identity development and the maintenance of existing peer relationships. Considering the growth of social media use, it is imperative to consider the development and provision of interventions and mental health care services to address the potential risks associated with increased social media use. Psychoeducation with adolescents and parents as to the risks, benefits, and constructive parental supervision of social media is also recommended. The review highlights the need for high-quality empirical research to further clarify the long-term impact of social media use, particularly within the South African context.