Postmenopausal women are at great risk of mental health deterioration, which may lead to morbidity and mortality. The decrement of mental health with aging is attributed to hormonal changes, lowered physical activity, sleep disturbances, economic factors, as well as modifiable variables such as smoking and obesity. Studies have shown controversial results on the association between obesity and mental health in postmenopausal women. This study is a systematic review of the evidence available on the association between obesity and mental health in postmenopausal women with the aim to identify the most reliable obesity measure that has been shown in association with mental health as well as the effective measures that have been practiced for improving mental health in postmenopausal obese women. CINAHL, Scopus, Science Direct and PubMed including Medline databases were searched. Out of 3,766 articles, 23 studies of average to good quality were included, out of which 17 were cross-sectional and 6 interventional. Out of the 17 studies, 12 showed a positive association between obesity and deterioration of mental health, 3 showed a negative association and two showed no association. From the interventional studies, 4 showed positive and two not significant impact of the intervention used on obesity and mental health. In conclusion, more studies showed a positive association between obesity, especially visceral obesity, and mental health issues particularly depression, anxiety, and sleep disorders. Combination of caloric restriction and exercise seems to have a better impact on the mental health of the postmenopausal in comparison with other interventions.