Drama therapy is applied to children and adolescents with psychosocial problems. Drama therapy is an experimental form of treatment which methodologically uses drama and theatre processes to achieve psychological growth. Although in clinical practice, drama therapy has been applied successfully, little is known about how and why drama therapy contributes to a decrease in psychosocial problems. A systematic narrative review was performed to obtain more insight into this issue. Eight databases were systematically searched. Ten out of 3742 studies were included, of which there were four random controlled trails, three non-controlled trials, and three pre-and post-test design studies. We identified the results, drama therapeutic means, attitude, and mechanism of change. Positive effects were found on overall psychosocial problems, internalizing and externalizing problems, social functioning, coping and regulation processes, social identity, and cognitive development. An adaptive approach was mentioned as the therapeutic attitude. The means established contribute to a dramatic reality, which triggers the mechanisms of change. These are processes that arise during treatment and which facilitate therapeutic change. We found ten supposed mechanisms of change to be frequently used in all studies. No direct relations were found between the results, drama therapeutic attitude, means, and mechanisms of change.