Refugees and asylum seekers are exposed to multiple burdensome experiences and suffer from ongoing post‐migration stressors that are known to affect the physical and mental health. In psychological treatment offered to refugees and asylum seekers, dropout is an important challenge. The current practice‐oriented review aims to provide for the first time knowledge on the prevalence, prediction and prevention of dropout in psychological treatment for refugees and asylum seekers. Due to the limited empirical evidence for this specific population, we synthesized refugee‐specific research but also reviewed the existing evidence on dropout from treatment in general and specifically discuss how the findings can be adapted to refugee populations. The review integrates literature from online databases, grey literature, hand search and expert contacts. Prevalence rates of dropout from psychological treatment in Western samples are reported at about 20%. For refugees and asylum seekers, evidence from single efficacy trials showed considerable variability in dropout rates (0%–64.7%). Further, for refugees and asylum seekers, specific sociodemographic variables, high initial impairment, deviating expectations and perceptions of mental health and psychological treatment, as well as external barriers seem to be important predictors for dropout. To prevent dropout, it is important to develop and promote cultural competencies, adapt the treatment to refugee‐specific needs and focus on role induction, preparation for treatment, fostering the therapeutic alliance and strengthening hope. Future specific research on dropout in treatment offered to refugees and asylum seekers is needed.