In order to increase crop yield in semi-arid and arid areas, plastic film mulching (PFM) is widely used in Northwestern China. To date, many studies have addressed the effects of PFM on soil physical and biochemical properties in rain-fed agriculture in Northwestern China, but the findings of different studies are often contradictory. Therefore, a comprehensive review of the impacts of PFM on soil water content, soil nutrients and food production is needed. We compiled the results of 1278 observations to evaluate the overall effects of PFM on soil water content, the distribution of nitrate and soil organic carbon, and crop yield in rain-fed agriculture in Northwestern China. Our results showed that PFM increased soil moisture and nitrate concentration in topsoils (0–20 cm) by 12.9% and 28.2%, respectively, but slightly decreased (1.8%) soil organic carbon (SOC) content in the 0–10 cm soil layer. PFM significantly increased grain yields by 43.1%, with greatest effect in spring maize (79.4%). When related to cumulative precipitation during the crop growing season, yield increase from PFM was greatest (72.8%) at 200–300 mm, which was attributed to the large increase for spring maize and potato, implying that crop zoning would be beneficial for PFM in this region. When related to N application rate, crop yields benefited most from PFM (80.2%) at 200–300 kg/ha. A cost-benefit analysis indicated that PFM increased economic return by an average of 29.5%, with the best improvement for spring maize (71.1%) and no increase for spring wheat. In conclusion, PFM can significantly increase crop yield and economic return (especially for spring maize) in rain-fed agriculture areas of Northwestern China. Crop zoning is recommended for PFM to achieve the largest economic benefit. However, full account needs to be taken of the environmental impacts relating to N loss, SOC depletion and film pollution to evaluate the sustainability of PFM systems and further research is required to quantify and mitigate these impacts.