Background & Purpose: Physical education (PE) is the only curricular subject that engages nearly all school-aged children in structured movement, and it is increasingly promoted internationally as a setting for whole-child development rather than for physical outcomes alone. Yet evidence on its emotional, social, and behavioral effects is dispersed across pedagogical models, study designs, and world regions, and syntheses have tended to treat single domains or single models in isolation. This review synthesizes the international evidence on the psychosocial outcomes associated with participation in PE among children and adolescents, and identifies the pedagogical and contextual conditions under which favorable outcomes are more likely. Materials for Analysis: A systematic review was conducted and reported in accordance with PRISMA 2020. Peer-reviewed studies published between January 2011 and July 2025 were sought in MEDLINE/PubMed, Scopus, Web of Science, SPORTDiscus, ERIC, and PsycINFO, supplemented by backward and forward citation searching. Eligible studies examined curricular PE with school-aged participants (5–18 years) and reported at least one emotional, social, or behavioral outcome. Records were screened in duplicate; methodological quality was appraised with the Mixed Methods Appraisal Tool (MMAT, 2018); and findings were combined using a theory-informed narrative and thematic synthesis. Meta-analysis was not undertaken because of substantial clinical and methodological heterogeneity. Results: The synthesis indicates consistent, generally small-to-moderate associations between PE participation and improved emotional (self-perception, enjoyment, resilience, psychological well-being), social (cooperation, peer relationships, prosocial behavior), and behavioral (engagement, responsibility, on-task conduct) outcomes. Effects were markedly stronger for model-based, deliberately structured PE—particularly the Teaching Personal and Social Responsibility model and cooperative learning—than for conventional, activity-focused delivery. Outcomes were moderated by intervention duration, implementation fidelity, teacher preparation, educational level, and sex. The evidence base is concentrated in a small number of high-income countries, relies on short interventions and self-report instruments, and is limited by inconsistent measurement and weak follow-up. Conclusions: PE can function as a credible context for psychosocial development, but the benefit is conditional on how PE is taught rather than on exposure to PE as such. Realizing these outcomes at scale requires intentional pedagogy, adequate dosage, teacher professional learning, and standardized, culturally validated measurement. The overall certainty of the evidence is low to moderate.