An illumination system includes a coherent light source, a phosphor switching module, a beam combining unit and a diffusion switching module. The coherent light source emits a coherent light beam. The phosphor switching module includes a light passing section and a first phosphor reflecting section. The light passing section and first phosphor reflecting section are switched into a transmission path of the coherent light beam by turns. The first phosphor reflecting section converts and reflects the coherent light beam into a first color beam. The beam combining unit combines the coherent light beam passing through the light passing section and the first color light beam. The diffusion switching module includes a light diffusion section and a first light permeable section to be switched into the transmission paths of the coherent light beam and the first color light beam by turns. A projection apparatus is also disclosed.