BACKGROUND Whether transgender people should be able to compete in sport in accordance with their gender identity is a widely contested question within the literature and among sport organisations, fellow competitors and spectators. Owing to concerns surrounding transgender people (especially transgender female individuals) having an athletic advantage, several sport organisations place restrictions on transgender competitors (e.g. must have undergone gender-confirming surgery). In addition, some transgender people who engage in sport, both competitively and for leisure, report discrimination and victimisation. OBJECTIVE To the authors' knowledge, there has been no systematic review of the literature pertaining to sport participation or competitive sport policies in transgender people. Therefore, this review aimed to address this gap in the literature. METHODS Eight research articles and 31 sport policies were reviewed. RESULTS In relation to sport-related physical activity, this review found the lack of inclusive and comfortable environments to be the primary barrier to participation for transgender people. This review also found transgender people had a mostly negative experience in competitive sports because of the restrictions the sport's policy placed on them. The majority of transgender competitive sport policies that were reviewed were not evidence based. CONCLUSIONS Currently, there is no direct or consistent research suggesting transgender female individuals (or male individuals) have an athletic advantage at any stage of their transition (e.g. cross-sex hormones, gender-confirming surgery) and, therefore, competitive sport policies that place restrictions on transgender people need to be considered and potentially revised.