This systematic review and meta-analysis investigated the effectiveness of physical activity (PA) interventions designed to improve mental health and wellbeing in university students. A systematic search of four databases (Web of Science, PsycINFO, PubMed and Scopus) was conducted following PRISMA guidelines. The reference lists of ten reviews were hand-searched for additional articles. A total of 72 studies were included, most of which (75%) had a low to moderate risk of bias based on an appraisal of their design, conduct and reporting using National Institute of Health appraisal tool. Intervention approaches varied greatly in exercise type, duration, session number and frequency. Studies employed a variety of psychological measures. Meta-analysis was performed using a random effect model to evaluate the intervention effect on five outcome measures. The remaining outcomes were narratively synthesized due to high heterogeneity. Overall, PA interventions were effective at reducing anxiety, depression and stress, and showed potential for enhancing wellbeing in university students. PA interventions of at least 8 weeks delivered on-campus and adopting moderate-to-vigorous intensity exercise such aerobic exercise, resistance training, Pilates and team sports appeared to be the most effective. Higher education institutions should consider implementing PA programs to support students’ mental health and wellbeing. The review protocol is based on a published protocol registered on Prospero (ID: CRD42023487530).