An illumination system including a first excitation light source, a second excitation light source and a first diffusion element is provided. The first excitation light source emits a first excitation light beam, and the second excitation light source emits a second excitation light beam. The first and second excitation light beams have different colors. The first diffusion element is disposed on transmission paths of the first excitation light beam and the second excitation light beam, and the first diffusion element includes a first diffusion region and a second diffusion region with different diffusion degrees, wherein at least one of the first excitation light beam and the second excitation light beam sequentially passes through the first diffusion region and the second diffusion region. A projection apparatus is also provided. The illumination system of the invention effectively mitigates a speckle phenomenon of the excitation light beams to achieve a better optical efficiency.