Olfactory impairment and rapid eye movement sleep behaviour disorder (RBD) are prodromal symptoms of Parkinson's disease (PD) that may be associated with each other. This review aims to investigate the significance of olfaction in the diagnosis and prognosis of patients with RBD and to assess moderating factors affecting olfactory performance. We searched articles on olfaction in RBD and PD in five electronic databases. We identified 32 studies for the systematic review and used 28 of those, including 2858 participants for meta-analysis. Results revealed significant deficits in odour identification (g=-1.80; 95% CI: -2.17 to -1.43), threshold (g=-1.29; 95% CI: -1.67 to -0.91), discrimination (g=-1.08; 95% CI: -1.28 to -0.87) and overall olfactory function (g=-1.64; 95% CI: -1.94 to -1.35) in patients with RBD. Except for the Unified Parkinson's Disease Rating Scale Part III scores, none of the known moderating variables (including age, sex, disease duration and years of education) accounted for the olfactory function heterogeneity in patients with RBD. We identified similar olfactory impairments in patients with RBD and patients with PD (either with or without underlying RBD). These findings suggest that olfactory impairment may be a sensitive and stable diagnostic biomarker of RBD and appears to be useful for identifying patients with idiopathic RBD at high risk for early conversion to PD.