An illumination system is adapted to provide an illumination light beam. The illumination system includes a light-source module and a light-shape adjustment module. The light-source module is adapted to emit a first light beam. The light-shape adjustment module is disposed on the transmission path of the first light beam and is adapted to adjust the light shape of the first light beam. The light-shape adjustment module includes a first light-diffusing element, a second light-diffusing element, and a first lens element. The first light beam sequentially passes through the first light-diffusing element, the first lens element, and the second light-diffusing element to form the illumination light beam. A projection device having the illumination system is also provided.