The aim of this study is to provide a systematic review of the effects of active and passive music engagement on cognitive development. Out of the 66 studies uncovered by the initial search, methods, and conclusions of 12 quantitative, 2 qualitative, and 12 review studies were analyzed. The present review shows active music engagement may improve cognitive skills in near transfer domains, such as verbal and motor skills, as well as auditory discrimination. Improvements in distant transfer domains have also been reported, such as enhanced general IQ, memory skills, numeracy and spatial skills, executive skills, and problem-solving. Benefits for affective and social skill development have also been shown for both active and passive music engagement, while passive engagement is specifically beneficial in clinical settings. However, there are studies that don’t report significant effects. Potential sources of bias are further explored, suggesting that this field may be victim to confirmation and publication bias. Method variety in measurements, sample size, and intervention length, along with the lack of methodological rigor and control groups, prevent us from concluding a direct causal relationship between music engagement and cognitive development. Implications for controlling confounding factors and identifying potential moderator mechanisms are discussed.