Effectively using immersive multi-user environments for digital applications (via virtual, augmented and mixed reality technologies) beckons the future of healthcare delivery in the metaverse. We aimed to evaluate the feasibility and effectiveness of these environments used in health applications, while identifying their design features. We systematically searched MEDLINE, PsycINFO, and Emcare databases for peer-reviewed original reports, published in English, without date restrictions until Aug 30, 2023, and conducted manual citation searching in Feb 2024. All studies using fully immersive extended reality technologies (e.g., head-mounted displays, smart glasses) while engaging more than one participant in an intervention with direct health benefits were included. A qualitative synthesis of findings is reported. The quality of research was assessed using JBI Critical Checklists. The review was pre-registered on PROSPERO (CRD42023479155). Of 2862 identified records, 10 studies were eligible. Included studies were mostly conducted with healthy young adults (five studies) and older adults (four studies). While they all used different models of Oculus/Meta headsets, their environments' designs were distinctive and aligned with their objectives. Findings indicated varying degrees of positive health outcomes, for engagement in rehabilitation, meaningful interactions across distances, positive affect, transformative experiences, mental health therapies, and motor skill learning. Participants reported high usability, motivation, enjoyment, presence and copresence. They also expressed the need for more training time with technology. Adopting an intentional intervention design, considering factors affecting presence and copresence, as well as integrating co-creation of the program with participants, seems integral to achieving positive health outcomes.