Background and Objectives: Dental caries has seen an increase in untreated cases, leading to significant health and quality-of-life impacts, necessitating innovative approaches like the promising non-operative management with silver diamine fluoride. This study aimed to evaluate the mechanisms of action of silver diamine fluoride on arresting dental caries in primary teeth. Materials and Methods: A systematic search was conducted across MEDLINE (PubMed), Google Scholar, and Wiley Online Library, including both in vivo and in vitro studies published from 1 January 2017 to 16 October 2022. The Cochrane Risk of Bias Tool assessed bias in in vivo studies, while the Quality Assessment Tool for In Vitro Studies evaluated the methodological quality of in vitro studies. Results: Nineteen publications met the inclusion criteria. Two studies indicated that silver diamine fluoride application significantly alters oral microflora, contributing to caries arrest. Additionally, two studies reported increased mineral density and mineral content in demineralised primary teeth, emphasising silver diamine fluoride’s role in promoting remineralisation. Three studies demonstrated significant improvements in surface microhardness, enhancing tooth resistance. However, no significant qualitative changes in bacterial species composition were noted. Modified silver diamine fluoride application techniques, including light curing or laser irradiation, enhanced efficacy, with light curing notably increasing surface microhardness. Based on a limited number of studies, no statistically significant differences in clinical effectiveness were observed with higher silver diamine fluoride concentrations or extended application durations. Conclusions: Silver diamine fluoride effectively induces quantitative changes in oral microflora and enhances the microhardness and mineral density of enamel and dentine in primary teeth, with modified application methods showing potential for improved outcomes.