Issues: Despite long-standing recommendations to integrate mental health care and alcohol and other drug (AOD) treatment, no prior study has synthesised evidence on the impact of physically co-locating these specialist services on health outcomes. Approach: We searched Medline, PsycINFO, Embase, Web of Science and CINAHL for studies examining health outcomes associated with co-located outpatient mental health care and AOD specialist treatment for adults with a dual diagnosis of substance use disorder and mental illness. Due to diversity in study designs, patient populations and outcome measures among the included studies, we conducted a narrative synthesis. Risk of bias was assessed using the MASTER scale. Key Findings: Twenty-eight studies met our inclusion criteria. We found provisional evidence that integrated care that includes co-located mental health care and AOD specialist treatment is associated with reductions in substance use and related harms and mental health symptom severity, improved quality of life, decreased emergency department presentations/hospital admissions and reduced health system expenditure. Many studies had a relatively high risk of bias and it was not possible to disaggregate the independent effect of physical co-location from other common aspects of integrated care models such as care coordination and the integration of service processes. Implications: There are few high-quality, peer-reviewed studies establishing the impact of co-located mental health care and AOD specialist treatment on health outcomes. Further research is required to inform policy, guide implementation and optimise practice. Conclusion: Integrated care that includes the co-location of mental health care and AOD specialist treatment may yield health and economic benefits.