Practising yoga improves symptoms of all types of mental health disorders other than eating disorders and cognition problems.
A review into the effect of exercise on major mental health problems found that yoga had positive effects on depression, sleep complaints, ADHD and schizophrenia.
Study author Murali Doraiswamy, professor of psychiatry and medicine at Duke University Medical Centre, said there is increasing evidence that the 5,000-year-old Indian practice can help to treat psychiatric disorders.
The research, published in the journal Frontiers in Psychiatry, reviewed over 100 studies and focused on 16 high-quality controlled studies looking at the effect of yoga on depression, schizophrenia, ADHD, sleep complaints, eating disorders and cognition problems.
The authors noted that while yoga is widely believed to have positive effect on mental health, strong scientific evidence is lacking. They wrote: "Yoga has become such a cultural phenomenon that it has become difficult for physicians and patients to differentiate legitimate claims from hype.
"Our goal was to examine whether the evidence matched the promise."
It is estimated that 30 million people worldwide regularly practice yoga. It focuses on strength, flexibility and breathing through a series of postures.
The NHS highlights its benefits, saying there is evidence to suggest this form of exercise helps people with arthritis, blood pressure, heart disease, aches and pains, including low back pain, depression and stress.
Doraiswamy and his colleagues found that yoga had a positive effect on all the mental health problems examined except eating disorders and cognition problems; evidence for these problems was either conflicting or lacking.
The review found that yoga influences elements in the body in a similar way that antidepressants and psychotherapy influence mental health.
As well as alleviating symptoms, Doraiswamy said yoga may have a part to play in preventing stress-related mental illnesses.
The number of medications available for mental health problem has increased but there is still a "considerable unmet need", study leader Meera Balasubramaniam said.
As well as poor compliance with medication, people are also becoming resistant to treatment and medications can cause significant side effects.
The World Health Organisation found that 60 percent of patients were still depressed a year after being treated with antidepressants. Research by the National Institute of Mental Health found remission in just a third of patients.
Doraiswamy said: "The search for improved treatments, including non-drug based, to meet the holistic needs of patients is of paramount importance and we call for more research into yoga as a global priority.
"If the promise of yoga on mental health was found in a drug, it would be the best selling medication world-wide."
Beth Murphy, head of information at the mental health charity Mind, said: "Although more research needs to be conducted into the benefits of yoga on specific mental health conditions, we know that people who are stressed or pressured by the demands of everyday life find that it's a great way to improve mood.
"If you are concerned about your mental health, we would recommend visiting a GP or other health professional first and foremost."