Decentralization is considered an important component of participatory democracy. However, despite its widespread implementation in the healthcare sector, its impact on health systems’ performance remains unclear. Using a theoretical framework based on the World Health Organization’s five decentralization variables—geography and sociodemographics, organization of political processes, functions and economic weight, steering, and control—we conducted a scoping review to unveil causal mechanisms linking each feature to equity, efficiency, and effectiveness. Following the PRISMA protocol, 1627 articles were screened, and 63 were selected for data analysis, with a focus on middle- and high-income countries. The findings show that the most frequently discussed forms of decentralization are fiscal and administrative, with a primary focus on how governance mechanisms affect equity and efficiency. The effects of decentralized healthcare governance on equity, efficiency, and effectiveness are diverse and contingent on contextual factors and the implementation processes. The spatial context (geography) of decentralization negatively impacts equity, and steering strongly affects effectiveness. Functions and economic weight significantly influence efficiency, albeit with variability. Overall, decentralization falls short of delivering substantial healthcare system benefits, although this depends on contextual factors.