Critical reviews over the past 10 yrs have found increased respiratory and allergic health outcomes for children living in damp and mouldy environments. However, recent studies have suggested that early childhood exposure to specific mould components may actually protect children from developing allergy. We conducted a systematic review of observational studies published in English from January 1980 to July 2010. This review was conducted according to systematic guidelines for Meta-analyses of Observational Studies in Epidemiology (MOOSE). The literature was searched using a computerised bibliographic database, PubMed. In order to increase the quality of the reviewed studies, meta-analyses of the effects of visible mould exposure on allergic health outcomes were performed and we evaluated the findings according to the Bradford Hill criteria for evidence of causation. The literature search identified 1,398 peer-reviewed scientific publications, and 61 studies that fulfilled the inclusion criteria were included in this review. We observed increased risks of allergic respiratory health outcomes in children exposed to visible mould and mould spores. These findings were confirmed by the results of the meta-analysis and in line with the evaluation criteria according to Bradford Hill. Visible mould was positively associated with asthma (OR 1.49 (95% CI 1.28-1.72)), wheeze (OR 1.68 (95% CI 1.48-1.90)) and allergic rhinitis (OR 1.39 (95% CI 1.28-1.51)). However, there was a tendency of lower risk for allergic health outcomes in children exposed to mould-derived components such as (1,3)-β-d-glucan and extracellular polysaccharides. These findings suggest that home environments with visible mould and mould spore exposure increase the risk of allergic respiratory health outcomes in children. However, further investigations are needed to examine the effects of exposure to mould-derived components as the current literature is inconclusive. In order to disentangle the different effects of overall microbial exposure on children's health, research should focus on specific microbial markers in the home, in combination with new assessment techniques including molecular methods.