Telephone-delivered cognitive behavioural therapy (CBT) is an increasingly popular mode of delivering care. We conducted a systematic review which focused on physical health outcomes. Literature searches were conducted to identify randomized controlled trials (RCTs) comparing telephone-delivered CBT for improving physical health with any other therapy or routine care in patients with chronic illness. Eight RCTs (1093 patients) met the eligibility criteria and were included in the review. Six of the eight RCTs compared the telephone intervention with routine care, one trial employed symptom monitoring as the control condition and the final trial compared telephone CBT to telephone supportive emotion-focused therapy. Meta-analysis found that telephone-delivered CBT significantly improved physical health in people with chronic illness (d = 0.225, 95% CI = 0.105, 0.344). Moderator analyses found that less therapist contact was associated with better outcomes, and telephone-delivered CBT was more effective for chronic illnesses that are not immediately life-threatening. The results of the meta-analysis support the use of telephone-delivered CBT as a tool for improving health in people with chronic illness. There is a need for future trials to evaluate cost-effectiveness.