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System dynamics is a strategic approach for modeling complex systems and analyzing their behavior. Dynamic behavior in entrepreneurial system can be modeled using System Dynamics Approach and dynamic hypotheses about the system`s behavior can be proposed and tested using simulation and computer aided tools. However, as the review of literature shows, studies which link system dynamics modeling with entrepreneurship are rare and fragmented. This article presents a review of studies on the subject followed by integration and discussion on main research issues that have been the focus of previous studies. The main aim of this review is to categorize the available research related to the application of system dynamics modeling in entrepreneurship to integrate research and enable recommendations for future research. The Results reveal that the previous research could be categorized under a two dimensional taxonomy composed of level of analysis and level of modeling. The Level of analysis has three categories: micro level, meso level and macro level. The Level of modeling has six hierarchical levels. This study identifies several gaps in the literature and discusses the future directions in this field.