Objective: To conduct a systematic review of reports on the physical and psychological effects of Tai Chi on various chronic medical conditions. Data Sources: Search of 11 computerized English and Chinese databases. Study Selection: Randomized controlled trials, nonrandomized controlled studies, and observational studies published in English or Chinese. Data Extraction: Data were extracted for the study objective, population characteristics, study setting, type of Tai Chi intervention, study design, outcome assessment, duration of follow-up, and key results. Data Synthesis: There were 9 randomized controlled trials, 23 nonrandomized controlled studies, and 15 observational studies in this review. Benefits were reported in balance and strength, cardiovascular and respiratory function, flexibility, immune system, symptoms of arthritis, muscular strength, and psychological effects. Conclusions: Tai Chi appears to have physiological and psychosocial benefits and also appears to be safe and effective in promoting balance control, flexibility, and cardiovascular fitness in older patients with chronic conditions. However, limitations or biases exist in most studies, and it is difficult to draw firm conclusions about the benefits reported. Most indications in which Tai Chi was applied lack a theoretical foundation concerning the mechanism of benefit. Well-designed studies are needed.