Underground residential spaces are considered a smart and vernacular response to the challenges of hot and arid climates. By leveraging passive strategies, they help regulate indoor temperatures, increase energy efficiency, and align with the environment. This comprehensive review article examines the thermal comfort performance of underground dwellings, specifically introducing and analyzing studies related to Iran, a region rich in examples of vernacular underground architecture. Through a systematic review of numerous domestic and international studies, the thermal behavior of these spaces is critically evaluated by considering key parameters such as soil thermal capacity, spatial configuration, material properties, and building orientation. The findings from the 73 reviewed studies indicate that underground spaces play a vital role in providing thermal comfort by significantly reducing cooling loads in summer and maintaining stable indoor temperatures throughout the year. This research not only highlights the remarkable potential of vernacular underground architecture as a sustainable solution for contemporary housing-as the first comprehensive systematic review focused on Iran-but also systematically identifies existing research gaps. Consequently, this review proposes clear pathways for future research aimed at advancing the understanding and application of these climate-responsive designs on a global scale.