Three‐dimensional virtual world (3DVW) have been adopted extensively in the education sector worldwide, and there has been remarkable growth in the application of these environments for distance learning. A wide variety of universities and educational organizations across the world have utilized this technology for their regular learning and teaching programs. The current study conducts a systematic review of the published studies relevant to the application of 3DVWs in higher education. A search of the literature was carried out in eight high‐ranking scientific digital libraries. Following scrutiny according to inclusion and exclusion criteria, 165 papers out of 1402 publications were selected for review from a variety of disciplines over a 10‐year time period. The systematic review process were summarised, a number of paper reviews were conducted and results in conjunction with applicability of 3DVWs in higher education were extracted. In this study, various application areas of 3DVWs in higher education were found and classified into 13 main categories. Additionally, implications for research and practice are presented to provide new directions for further research and practice in the field.