Recent years have witnessed the increasing literature on using smart insoles in health and well-being, and yet, their capability of daily living activity recognition has not been reviewed. This paper addressed this need and provided a systematic review of smart insole-based systems in the recognition of Activities of Daily Living (ADLs). The review followed the PRISMA guidelines, assessing the sensing elements used, the participants involved, the activities recognised, and the algorithms employed. The findings demonstrate the feasibility of using smart insoles for recognising ADLs, showing their high performance in recognising ambulation and physical activities involving the lower body, ranging from 70% to 99.8% of Accuracy, with 13 studies over 95%. The preferred solutions have been those including machine learning. A lack of existing publicly available datasets has been identified, and the majority of the studies were conducted in controlled environments. Furthermore, no studies assessed the impact of different sampling frequencies during data collection, and a trade-off between comfort and performance has been identified between the solutions. In conclusion, real-life applications were investigated showing the benefits of smart insoles over other solutions and placing more emphasis on the capabilities of smart insoles.