Being a university student can be challenging. As such, it is imperative to gain insight into the positive psychology of university students. In this paper, happiness and life satisfaction among university students in Malaysia are reviewed accordingly. Two research questions were highlighted, that is, (i) factors affecting happiness and (ii) factors affecting life satisfaction. The review was conducted using a framework suggested by Arksey and O’Maley (2005). EBSCOhost, ScienceDirect, and Scopus electronic databases were searched for published articles from 2000 to 2021. A total of 588 titles were extracted from electronic databases. After considering inclusion criteria and research questions, 19 articles were selected for review. Happiness was found to have positive relations with social skills, psychological well-being attributes, problem-solving skills, parental home involvement, religious commitment, and religiosity. Factors such as positive religious coping, self-confidence, being an extrovert, and resiliency are found to correlate with life satisfaction. Those with suicidal attitudes, loneliness, shyness, and poorer health displayed lower life satisfaction. Students’ life satisfaction is also associated with happiness, intrapreneurial self-capital, intercultural sensitivity, flourishing, spiritual well-being, and spiritual involvement. The review assists the university authorities and student management unit in planning effective curricula and programs for students’ psychological well-being.