Drones have recently become a new tool in railway inspection and monitoring (RIM) worldwide, but there is still a lack of information about the specific benefits and costs. This study conducts a systematic literature review (SLR) of the applications, opportunities, and challenges of using drones for RIM. The SLR technique yielded 47 articles filtered from 7,900 publications from 2014 to 2022. The SLR found that key motivations for using drones in RIM are to reduce costs, improve safety, save time, improve mobility, increase flexibility, and enhance reliability. Nearly all the applications fit into the categories of defect identification, situation assessment, rail network mapping, infrastructure asset monitoring, track condition monitoring, and obstruction detection. The authors assessed the open technical, safety, and regulatory challenges. The authors also contributed a cost analysis framework, identified factors that affect drone performance in RIM, and offered implications for new theories, management, and impacts to society.