Preterm infants are at risk of increased trans-epidermal water loss and infections due to epidermal immaturity. The emollient and anti-infective properties of coconut oil make it a potentially beneficial topical agent for this population. We aimed to systematically review randomised trials assessing the effects of topical coconut oil in preterm infants. Medline, EMBASE, Cochrane Central Register of Controlled Trials and CINAHL were searched. Seven trials (n = 727 infants) were included. The majority of trials included relatively mature infants (gestation > 32 weeks, birth weight > 1200 g). The duration of intervention (5–31 days) and outcomes of interest varied among included studies. Meta-analysis using random effects model found significantly lower incidence of hospital-acquired blood stream infections (HABSI) in the coconut oil group (11/164 vs 32/166; relative risk 0.35, 95% confidence interval 0.18, 0.67, p = 0.001; I2 = 0%, two RCTs). Overall, infants in the coconut oil group had decreased water loss, decreased infection rates, better growth and skin condition. There were no significant adverse effects associated with coconut oil application. The overall quality of evidence was considered moderate for the outcome of HABSI and low for the outcome of physical growth based on GRADE guidelines. Conclusion: Topical coconut oil application to the skin may be beneficial in preterm infants, but the quality of evidence is low to moderate. Adequately powered randomised controlled trials, especially in very preterm (< 32 weeks) and extremely preterm (< 28 weeks) infants, are needed.What is Known:• Coconut oil has been used traditionally for topical application in terms of infants in Asian countriesWhat is New:• This systematic review found that topical application of coconut oil may reduce the risk of infection and improve weight gain and skin condition in preterm infants. However, the quality of evidence was considered to be moderate to low based on GRADE guidelines.