A systematic review was conducted to determine the relationship between academic assessment and medical student psychological distress with the aim of informing assessment practices. A systematic literature search of six electronic databases (Medline, Medline IN PROCESS, PubMed, EMBASE, Psychinfo, ERIC) from 1991 to May 2014 was completed. Articles focusing on academic assessment and its relation to stress or anxiety of medical students were included. From 3,986 potential titles, 82 full-text articles were assessed for eligibility, and 23 studies met review inclusion criteria. Studies focused on assessment stress or anxiety, and assessment performance. Consistent among the studies was the finding that assessment invokes stress or anxiety, perhaps more so for female medical students. A relationship may exist between assessment stress or anxiety and impaired performance. Significant risks of bias were common in study methodologies. There is evidence to suggest academic assessment is associated with psychological distress among medical students. However, differences in the types of measures used by researchers limited our ability to draw conclusions about which methods of assessment invoke greater distress. More rigorous study designs and the use of standardized measures are required. Future research should consider differences in students’ perceived significance of assessments, the psychological effects of constant exposure to assessment, and the role of assessment in preparing students for clinical practice.