Depression is one of the most prevalent mental illnesses worldwide and a leading cause of disability, especially in the setting of treatment resistance. In recent years, repetitive transcranial magnetic stimulation (rTMS) has emerged as a promising alternative strategy for treatment-resistant depression and its clinical efficacy has been investigated intensively across the world. However, the underlying neurobiological mechanisms of the antidepressant effect of rTMS are still not fully understood. This review aims to systematically synthesize the literature on the neurobiological mechanisms of treatment response to rTMS in patients with depression. Medline (1996–2014), Embase (1980–2014) and PsycINFO (1806–2014) were searched under set terms. Three authors reviewed each article and came to consensus on the inclusion and exclusion criteria. All eligible studies were reviewed, duplicates were removed, and data were extracted individually. Of 1647 articles identified, 66 studies met both inclusion and exclusion criteria. rTMS affects various biological factors that can be measured by current biological techniques. Although a number of studies have explored the neurobiological mechanisms of rTMS, a large variety of rTMS protocols and parameters limits the ability to synthesize these findings into a coherent understanding. However, a convergence of findings suggest that rTMS exerts its therapeutic effects by altering levels of various neurochemicals, electrophysiology as well as blood flow and activity in the brain in a frequency-dependent manner. More research is needed to delineate the neurobiological mechanisms of the antidepressant effect of rTMS. The incorporation of biological assessments into future rTMS clinical trials will help in this regard.