ObjectiveTime‐varying treatments are common in observational studies. However, when assessing treatment effects, the methodological framework has not been systematically established for handling time‐varying treatments. This study aimed to examine the current methods for dealing with time‐varying treatments in observational studies and developed practical recommendations.MethodsWe searched PubMed from 2000 to 2021 for methodological articles about time‐varying treatments, and qualitatively summarized the current methods for handling time‐varying treatments. Subsequently, we developed practical recommendations through interactive internal group discussions and consensus by a panel of external experts.ResultsOf the 36 eligible reports (22 methodological reviews, 10 original studies, 2 tutorials and 2 commentaries), most examined statistical methods for time‐varying treatments, and only a few discussed the overarching methodological process. Generally, there were three methodological components to handle time‐varying treatments. These included the specification of treatment which may be categorized as three scenarios (i.e., time‐independent treatment, static treatment regime, or dynamic treatment regime); definition of treatment status which could involve three approaches (i.e., intention‐to‐treat, per‐protocol, or as‐treated approach); and selection of analytic methods. Based on the review results, a methodological workflow and a set of practical recommendations were proposed through two consensus meetings.ConclusionsThere is no consensus process for assessing treatment effects in observational studies with time‐varying treatments. Previous efforts were dedicated to developing statistical methods. Our study proposed a stepwise workflow with practical recommendations to assist the practice.