Sensory modulation, as a treatment for sensory modulation disorders in adults with psychiatric conditions, has been implemented by occupational therapists for more than two decades. The purpose of this systematic literature review was to evaluate published research evidence relating to this intervention. The aim of the study was to determine if there was established evidence for the effectiveness of sensory modulation in treating sensory modulation disorder in adults with schizophrenia and to identify any gaps in knowledge to guide further research. We utilized Australia’s National Health and Medical Research Council (NHMRC)’s levels of evidence and recommendation grading and the Rosalind Franklin Research Appraisal Instrument (RF-QRA) to review selected articles. The results were then summarized and reported utilizing the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework. A total of 17 studies were included in the study. We concluded that there is preliminary evidence for the existence of sensory modulation disorder in schizophrenia and the effectiveness of sensory modulation interventions for reducing distress. We recommended further studies on the effectiveness of sensory modulation with better rigor and advise that guidelines be developed for use in practice by clinicians.