Compared to laboratory equipment inertial sensors are inexpensive and portable, permitting the measurement of postural sway and balance to be conducted in any setting. This systematic review investigated the inter-sensor and test-retest reliability, and concurrent and discriminant validity to measure static and dynamic balance in healthy adults. Medline, PubMed, Embase, Scopus, CINAHL, and Web of Science were searched to January 2021. Nineteen studies met the inclusion criteria. Meta-analysis was possible for reliability studies only and it was found that inertial sensors are reliable to measure static standing eyes open. A synthesis of the included studies shows moderate to good reliability for dynamic balance. Concurrent validity is moderate for both static and dynamic balance. Sensors discriminate old from young adults by amplitude of mediolateral sway, gait velocity, step length, and turn speed. Fallers are discriminated from non-fallers by sensor measures during walking, stepping, and sit to stand. The accuracy of discrimination is unable to be determined conclusively. Using inertial sensors to measure postural sway in healthy adults provides real-time data collected in the natural environment and enables discrimination between fallers and non-fallers. The ability of inertial sensors to identify differences in postural sway components related to altered performance in clinical tests can inform targeted interventions for the prevention of falls and near falls.