The objective of this review is to identify sanitation failures that have contributed to the occurrence of diarrhoeal disease outbreaks among displaced populations living in camps. Three electronic databases (Medline, Embase, Global Health) and reference lists were searched for peer-reviewed literature using a systematic approach. Articles published since 1960 describing both diarrhoeal disease outbreaks and sanitation characteristics in camps hosting displaced populations were included. Evidence linking outbreaks to sanitation-related factors was synthesized and critically appraised. The search yielded 608 articles, of which 12 met inclusion criteria. They described cholera and shigellosis outbreaks occurring in 21 different camps between 1974 and 2009. Recurring contributing factors across outbreaks included a sudden population influx, inadequate provision or maintenance of latrines, sudden rains, and insufficient safe water quantities. Most studies were descriptive only or did not consider sanitation-related exposures in risk factor analyses. However, two case-control studies found that cases were significantly more likely than controls to share latrines with several households. Two other case-control studies identified an increased risk of infection from exposure to drinking contaminated river or shallow well water. Evidence from previous outbreak investigations illustrates how sanitation failures, particularly following population influxes, can contribute to the occurrence of diarrhoeal disease outbreaks in refugee camps. Further development and application of sanitation assessment tools and metrics would enable more robust evaluation of risks associated with specific sanitation-related exposures and the effectiveness of interventions. Recent guidelines address the identified risk factors but stakeholders should be aware of the impact of population dynamics.