The manufacturing industry is facing a major challenge in balancing economic performance with environmental sustainability. To address this challenge, extant research has suggested that servitization could help align these objectives. However, the current evidence base is too scattered for policymakers to act on and support servitization in a targeted manner. Therefore, we conduct a systematic literature review to analyze over 120 research papers to establish the current understanding of the impact of servitization on the environmental and economic performance of a firm, and identify the contextual variables affecting this impact. The study identifies and critically appraises the body of literature that provides the current evidence base on the impact of servitization, the core areas of impact investigated and the methods that are used to establish this impact. Additionally, we conduct a thematic analysis of variables of impact to explore the theoretical perspectives that are used to explain the impact of servitization. Building on these theoretical perspectives we offer concrete propositions to further develop the research on the impact of servitization on environmental and economic performance.