Solitary plasmacytoma of bone (SPB) is a localized form of plasma cell neoplasm where jaw involvement is rare. Distinguishing SPB from other plasma cell neoplasms is critical for treatment and survival. Here, a case of SPB of mandible in an elderly female is reported. Histopathological diagnosis of plasma cell neoplasm was confirmed immunohistochemically with MUM1 and CD138 positivity and multiple myeloma (MM) was ruled out on performing systemic workup. Prognosis of SPB worsens when it transforms into MM. A systematic review was undertaken with the objective to determine the factors affecting conversion of SPB to MM. An electronic search was undertaken with PubMed/MEDLINE, Web of Science and Science Direct. Fifty cases of SPB of jaw from 29 publications were reviewed. SPB commonly presents as a painless swelling. Radiographically, it is commonly seen as multilocular radiolucency with well-defined borders. Follow-up data showed that nine cases turned into MM in a mean duration of 1 year 9 months and 12 patients died after median disease-free survival of 6 years 9 months. Prognosis of SPB is found to be affected by tumor size (≥5 cm), anaplasia of tumor cells, Ki-67 labeling index, vascularity of the tumor, presence of clonal bone marrow plasma cells, serum immune globulin level, dose of radiotherapy and persistence of M protein after treatment. There is a need to identify prognostic subgroups in SPB based on these factors. Furthermore, studies are necessary for standardization of treatment protocol to halt or prolong the progression of SPB to MM.