Background: Currently, melatonin is used to treat children and adolescents with insomnia without knowing the full extent of the short-term and long-term consequences. Our aim was to provide clinicians and guideline panels with a systematic assessment of serious—and non-serious adverse events seen in continuation of melatonin treatment and the impact on pubertal development and bone health following long-term administration in children and adolescents with chronic insomnia. Methods: We searched PubMed, Embase, Cinahl and PsycINFO via Ovid, up to March 17, 2023, for studies on melatonin treatment among children and adolescents (aged 5–20 years) with chronic insomnia. The language was restricted to English, Danish, Norwegian, and Swedish. Outcomes were non-serious adverse events and serious adverse events assessed 2–4 weeks after initiating treatment and pubertal development and bone health, with no restriction on definition or time of measurement. Observational studies were included for the assessment of long-term outcomes, and serious and non-serious adverse events were assessed via randomised studies. The certainty of the evidence was assessed using Grades of Recommendation, Assessment, Development and Evaluation (GRADE). The protocol is registered with the Danish Health Authority. Findings: We identified 22 randomised studies with 1350 patients reporting on serious—and non-serious adverse events and four observational studies with a total of 105 patients reporting on pubertal development. Melatonin was not associated with serious adverse events, yet the number of patients experiencing non-serious adverse events was increased (Relative risk 1.56, 95% CI 1.01–2.43, 17 studies, I² = 47%). Three studies reported little or no influence on pubertal development following 2–4 years of treatment, whereas one study registered a potential delay following longer treatment durations (>7 years). These findings need further evaluation due to several methodological limitations. Interpretation: Children who use melatonin are likely to experience non-serious adverse events, yet the actual extent to which melatonin leads to non-serious adverse events and the long-term consequences remain uncertain. This major gap of knowledge on safety calls for caution against complacent use of melatonin in children and adolescents with chronic insomnia and for more research to inform clinicians and guideline panels on this key issue. Funding: The Danish Health Authority. The Parker Institute, Bispebjerg and Frederiksberg Hospital, supported by the Oak Foundation.