OBJECTIVES: Psychological and existential distress is prevalent among patients with life-threatening cancer, significantly impacting their quality of life. Psilocybin-assisted therapy has shown promise in alleviating these symptoms. This systematic review aims to synthesize the evidence on the efficacy and safety of psilocybin in reducing cancer-related distress. METHODS: We searched MEDLINE, APA PsycINFO, Cochrane database, Embase, and Scopus from inception to February 8, 2024, for randomized controlled trials (RCTs), open-label trials, qualitative studies, and single case reports that evaluated psilocybin for cancer-related distress. Data were extracted on study characteristics, participant demographics, psilocybin and psychotherapy intervention, outcome measures, and results. Two authors independently screened, selected, and extracted data from the studies. Cochrane Risk of Bias for RCTs and Methodological Index for Non-Randomized Studies criteria were used to evaluate study quality. This study was registered with PROSPERO (CRD42024511692). RESULTS: Fourteen studies met the inclusion criteria, comprising three RCTs, five open-label trials, five qualitative studies, and one single case report. Psilocybin therapy consistently showed significant reductions in depression, anxiety, and existential distress, with improvements sustained over several months. Adverse effects were generally mild and transient. SIGNIFICANCE OF RESULTS: This systematic review highlights the potential of psilocybin-assisted therapy as an effective treatment for reducing psychological and existential distress in cancer patients. Despite promising findings, further large-scale, well-designed RCTs are needed to confirm these results and address existing research gaps.