According to the World Health Organization, more than 10% of adolescents and children are affected by mental health problems worldwide. Despite this statistic, the public is often ignorant of the various environmental factors in everyday lives, adversely affecting children’s and adolescents’ mental health. The current systematic review aims to identify these environmental factors to ensure minimal exposure to sustain healthy mental states. Thematic analysis of relevant literature categorizes these environmental factors into various themes, like Physical, Home, Social, Socioeconomic, and Digital Environments. These themes have adverse effects, like externalizing symptoms, higher anxiety, and depressive episodes, on the mental health states. Abuse came out as a significant sub-theme affecting children’s and adolescent’s mental health throughout the twenty-years literature, either in the form of sexual harassment, physical aggression, or cyberbullying. This study’s findings have important implications in devising focused interventions and formulating policies regarding mental health, especially for children and adolescents.