Background Tai chi, also called taiji or tai chi chuan, is a form of mind–body exercise that originated from China. It combines Chinese martial arts and meditative movements that promote balance and healing of the mind and body, involving a series of slowly performed, dance-like postures that flow into one another. As it comprises mental concentration, physical balance, muscle relaxation, and relaxed breathing, tai chi shows great potential for becoming widely integrated into the prevention and rehabilitation of a number of medical and psychological conditions. Purpose A growing body of clinical research has begun to evaluate the efficacy of tai chi as a therapy for a variety of health issues. A systematic review and meta-analysis were carried out on randomized controlled trials (RCTs) and quasi-experimental (Q-E) trials that studied the effects of tai chi on psychological well-being. Method Drawn from English and Chinese databases, 37 RCTs and 5 Q-E studies published up to May 31, 2013 were included in the systematic review. The methodological quality of the RCTs was evaluated based on the following criteria: adequate sequence generation, allocation concealment, blinding, completeness of outcome data, selective reporting, and other potential biases. Statistical analyses were performed using Review Manager version 5.0. Results The studies in this review demonstrated that tai chi interventions have beneficial effects for various populations on a range of psychological well-being measures, including depression, anxiety, general stress management, and exercise self-efficacy. Meta-analysis was performed on three RCTs that used depression as an outcome measure (ES=−5.97; 95 % CI −7.06 to −4.87), with I 2=0 %. Conclusion In spite of the positive outcomes, the studies to date generally had significant methodological limitations. More RCTs with rigorous research design are needed to establish the efficacy of tai chi in improving psychological well-being and its potential to be used in interventions for populations with various clinical conditions.