Impacted third molars are third molars that are blocked, by soft tissue or bone, from fully erupting through the gum. This can cause pain and disease. The treatment options for people with impacted third molars are removal or retention with standard care. If there are pathological changes, the current National Institute for Health and Care Excellence guidance states that the impacted third molar should be removed. The objective of this study was to appraise the clinical effectiveness and cost-effectiveness of the prophylactic removal of impacted mandibular third molars compared with retention of, and standard care for, impacted third molars. Five electronic databases were searched (1999 to 29 April 2016) to identify relevant evidence [The Cochrane Library (searched 4 April 2016 and 29 April 2016), MEDLINE (searched 4 April 2016 and 29 April 2016), EMBASE (searched 4 April 2016 and 29 April 2016), EconLit (searched 4 April 2016 and 29 April 2016) and NHS Economic Evaluation Database (searched 4 April 2016)]. Studies that compared the prophylactic removal of impacted mandibular third molars with retention and standard care or studies that assessed the outcomes from either approach were included. The clinical outcomes considered were pathology associated with retention, post-operative complications following extraction and adverse effects of treatment. Cost-effectiveness outcomes included UK costs and health-related quality-of-life measures. In addition, the assessment group constructed a de novo economic model to compare the cost-effectiveness of a prophylactic removal strategy with that of retention and standard care. The clinical review identified four cohort studies and nine systematic reviews. In the two studies that reported on surgical complications, no serious complications were reported. Pathological changes due to retention of asymptomatic impacted mandibular third molars were reported by three studies. In these studies, the extraction rate for retained impacted mandibular third molars varied from 5.5% to 31.4%; this variation can be explained by the differing follow-up periods (i.e. 1 and 5 years). The findings from this review are consistent with the findings from previous systematic reviews. Two published cost-effectiveness studies were identified. The authors of both studies concluded that, to their knowledge, there is currently no economic evidence to support the prophylactic removal of impacted mandibular third molars. The results generated by the assessment group's lifetime economic model indicated that the incremental cost-effectiveness ratio per quality-adjusted life-year gained for the comparison of a prophylactic removal strategy with a retention and standard care strategy is £11,741 for people aged 20 years with asymptomatic impacted mandibular third molars. The incremental cost per person associated with prophylactic extraction is £55.71, with an incremental quality-adjusted life-year gain of 0.005 per person. The base-case incremental cost-effectiveness ratio per quality-adjusted life-year gained was found to be robust when a range of sensitivity and scenario analyses were carried out. Limitations of the study included that no head-to-head trials comparing the effectiveness of prophylactic removal of impacted mandibular third molars with retention and standard care were identified with the assessment group model that was built on observational data. Utility data on impacted mandibular third molars and their symptoms are lacking. The evidence comparing the prophylactic removal of impacted mandibular third molars with retention and standard care is very limited. However, the results from an exploratory assessment group model, which uses available evidence on symptom development and extraction rates of retained impacted mandibular third molars, suggest that prophylactic removal may be the more cost-effective strategy. Effectiveness evidence is lacking. Head-to-head trials comparing the prophylactic removal of trouble-free impacted mandibular third molars with retention and watchful waiting are required. If this is not possible, routine clinical data, using common definitions and outcome reporting methods, should be collected. This study is registered as PROSPERO CRD42016037776. This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 24, No. 30. See the NIHR Journals Library website for further project information.