Urban planning and design can impact mental health, but it is unclear how ever-growing and changing cities can sustain the psychological wellbeing of vulnerable groups, who are among the most mentally sensitive to spatial inequalities. This systematic review synthesised quantitative and qualitative studies on urban design interventions and their impact on wellbeing in vulnerable groups. Using the Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) guidelines, we searched five online databases from inception to May 2020. A total of 10 papers were included. We found mixed evidence of benefits for wellbeing linked to urban regeneration projects or focused interventions (green spaces, transport, security). Interventions that were centred around participation, sustainable living, and quality of design (e.g., perceived sense of safety) were associated with increased residential satisfaction and wellbeing, particularly among low-income communities and women. Risk of bias was low to medium, but there was high methodological heterogeneity; studies were mainly from Western countries, and none of the included studies investigated the experiences of people with disabilities, migrants, or racial minorities. This review highlights the importance of inclusive and sustainable design interventions to create happy places for all strata of society, although further investigation is warranted.