This systematic review and meta‐analysis aimed to study the efficacy and safety of chamomile for the treatment of state anxiety, generalized anxiety disorders (GADs), sleep quality, and insomnia in human. Eleven databases including PubMed, Science Direct, Cochrane Central, and Scopus were searched to retrieve relevant randomized control trials (RCTs), and 12 RCTs were included. Random effect meta‐analysis was performed by meta package of R statistical software version 3.4.3 and RevMan version 5.3. Our meta‐analysis of three RCTs did not show any difference in case of anxiety (standardized mean difference = −0.15, 95% CI [−0.46, 0.16], P = 0.4214). Moreover, there is only one RCT that evaluated the effect of chamomile on insomnia and it found no significant change in insomnia severity index (P > 0.05). By using HAM‐A scale, there was a significant improvement in GAD after 2 and 4 weeks of treatment (mean difference = −1.43, 95% CI [−2.47, −0.39], P = 0.007), (MD = −1.79, 95% CI [−3.14, −0.43], P = 0.0097), respectively. Noteworthy, our meta‐analysis showed a significant improvement in sleep quality after chamomile administration (standardized mean difference = −0.73, 95% CI [−1.23, −0.23], P < 0.005). Mild adverse events were only reported by three RCTs. Chamomile appears to be efficacious and safe for sleep quality and GAD. Little evidence is there to show its effect on anxiety and insomnia. Larger RCTs are needed to ascertain these findings.