Polyunsaturated fatty acids are critically important for newborn nutrition and in the trajectory of growth and developmental processes throughout early life. This systematic review (PROSPERO ID: CRD42023400059) critically analyzes literature pertaining to how omega-3 and omega-6 fatty acids in human milk are related to health outcomes in early life. Literature selected for the review were published between 2005 and 2020 and included assessments in healthy term children between 0 and 5 years of age. The studies reported the relation between human milk fatty acids docosahexaenoic acid (C22:6n-3, DHA), eicosapentaenoic acid (C20:5n-3, EPA), alpha-linolenic acid (C18:3n-3, ALA), arachidonic acid (C20:4n-6, AA), and linoleic acid (C18:2n-6, LA) with three domains of health outcomes: neurodevelopment, body composition, and allergy, skin & eczema. Results from the 21 studies consistently suggested better health outcomes across the three domains for infants consuming milk with higher concentrations of total n-3, DHA, EPA, and ALA. Negative health outcomes across the three domains were associated with higher levels of total n-6, AA, and LA in milk. N-3 and n-6 content of milk were related to neurodevelopmental, body composition, and allergy, skin & eczema outcomes with moderate certainty. Maternal diet impacting milk fatty acid content and fatty acid desaturase genotype modifying physiologic responses to fatty acid intake were prominent gaps identified in the review using the NIH Quality Assessment Tool for Observational Cohort and Cross-Sectional Studies and GRADE approach. This research study can inform baby nutrition product development, and fatty acid intake recommendations or dietary interventions for mothers and children.