Physical education is a relevant setting to develop students' social competence. The sport education model has the potential to promote social competence as it provides students with meaningful socialization opportunities. The purpose of this literature review paper was to: (1) describe the inherent structures and characteristics of the sport education model that may promote social competence; and (2) summarize the patterns of the published studies that examined social competence in sport education-based physical education; and then (3) elucidate the effect of sport education on social competence in physical education. We used keywords to search full-text articles related to social competence in sport education and then applied inclusion criteria to identify 31 articles for data analysis. The sport education model has shown usefulness in advancing citizenship education and social relationship. Two essential factors for nurturing students' social competence in sport education-based physical education are: (1) striking an optimal balance between competition and cooperation; and (2) promoting inclusiveness. The article concludes with highlighting three research gaps that warrant future research.