An illumination system including a first laser light source, a diffusion sheet and a light integration rod is provided. The first laser light source is configured to generate a first laser beam. The diffusion sheet is located on a transmission path of the first laser beam. The light integration rod has a light entering surface and a light exiting surface. The diffusion sheet is located between the first laser light source and the light integration rod. The first laser beam from the diffusion sheet enters the light integration rod through the light entering surface and exits the light integration rod through the light exiting surface. The light integration rod is adapted to convert the first laser beam to an illumination beam. The area of the light entering surface is larger than the area of the light exiting surface. A projection apparatus is also provided.