Background Cognitive behavioural therapy for low self‐esteem (LSE) has shown promise as a trans‐diagnostic model for treating mental health difficulties in adults. To ascertain the potential value of this treatment approach in working with young people with internalizing disorders, we need to develop our understanding of LSE within these mental health conditions. The aim of this review is to explore (a) the co‐occurrence of clinically significant anxiety/depression and LSE in young people (aged 18 years and younger), and (b) the association between LSE in childhood and adolescence and mental health difficulties in later adolescence and emerging adulthood. Method A systematic search of three electronic databases (PsychInfo/Pubmed/Google Scholar) was conducted to identify relevant studies. Results Ten studies examining the association between LSE and clinically significant anxiety/depression in young people met the inclusion criteria, as did eight studies investigating the association between LSE in young people with internalizing difficulties in later adolescence/emerging adulthood. Although relatively few studies were identified, studies consistently supported the co‐occurrence of LSE and internalizing disorders in young people, particularly in young people with co‐morbid anxiety and depression. LSE in childhood and adolescence appears to be a relatively weak predictor of the development of anxiety and depression in later adolescence and early adulthood. Conclusions Further research investigating the relationship between low self‐esteem and mental health difficulties in young people and its implications for treatment in this age group is indicated.