There is a large and growing body of evidence on the health benefits of engagement in leisure activities (voluntary, enjoyable non-work activities, such as hobbies, arts, volunteering, community group membership, sports, and socialising). However, there is no unifying framework explaining how leisure activities affect health: what the mechanisms of action are by which engagement with leisure activities leads to the prevention, management, or treatment of mental and physical illness. In this Review, we identify and map over 600 mechanisms of action. These mechanisms can be categorised as psychological, biological, social, and behavioural processes that operate at individual (micro), group (meso), and societal (macro) levels, and are synthesised into a new theoretical framework: the Multi-level Leisure Mechanisms Framework. This framework situates understanding of leisure activities within the theoretical lens of complex adaptive systems and aims to support the design of more theory-driven, cross-disciplinary studies.