Despite ongoing local and international peace efforts, the Jews, Arabs, and other residents of Israel and the Palestinian territories (i.e., the West Bank and Gaza) have endured decades of political, social, and physical upheaval, with periodic eruptions of violence. It has been theorized that the psychological impact of the Israeli–Palestinian conflict extends beyond the bounds of psychiatric disorders such as posttraumatic stress disorder (PTSD). Exposure to the ongoing conflict may lead to changes in the way Israelis and Palestinians think, feel, and act; while these changes may not meet the thresholds of PTSD or depression, they nonetheless could have a strong public health impact. It is unclear whether existing studies have found associations between exposure to the conflict and nonclinical psychological outcomes. We conducted a systematic review to synthesize the empirical research on the Israeli–Palestinian conflict and its psychological consequences. As a whole, the body of literature we reviewed suggests that exposure to regional political conflict and violence may have detrimental effects on psychological well-being and that these effects likely extend beyond the psychiatric disorders and symptoms most commonly studied. We found evidence that exposure to the conflict informs not only the way Israelis and Palestinians think, feel, and act but also their attitudes toward different religious and ethnic groups and their degree of support for peace or war. We also found that Palestinians may be at particularly high risk of experiencing psychological distress as a result of the conflict, though more research is needed to determine the extent to which this is due to socioeconomic stress. Our review suggests the need for more studies on the nonclinical psychological aspects of the Israeli–Palestinian conflict as well as for longitudinal studies on the impact of the conflict on both Israelis and Palestinians.