Participation in music therapy offers opportunities for the participants to engage in identity work -to define, develop, or reflect on their understanding of themselves, and to cultivate new expressions of self-identity. The music therapy involves breaking away from the reality and engaging in intense interactions, which in turn facilitate relationships between participants. Patients tend to be more open to new kinds of experiences and explore new ways of perceiving themselves and others. Their self-understanding develops and leads to self-acceptance and personal growth. Although questions concerning the relationship between music therapy and human identity have been asked since antiquity, many issues have still not been resolved. As of today, there are no publications that systematically review the current state of knowledge. This article aims to review the available empirical evidence in order to identify the relationship between music therapy processes, identity, and specific individual identity variables, such as self-esteem. Also, it attempts to discover how self-regulatory behavior relates to both general music instruction and interventions designed to enhance self-esteem and identity. We searched PubMed and PsycInfo up to 13.09.2016. Screening, eligibility, and data extraction were done by one reviewer. Out of 31 relevant records, 20 were assessed for eligibility, and 14 were included. There was marked variation across included studies regarding type of MT approach used, type of participants, settings, outcomes and measurement tools. A qualitative analysis showed that expression of emotion and a sense of agency (which is considered valuable for both the client and those around them) is a way to provide one's damaged Self with healthful aspects of personality, thus improving one's self-esteem. This review provides insight into the effects of music therapy processes, specifically self-knowledge (music identity) and self-esteem determined by the psychological processes entailed in some kinds of music activities.