Context: Ever since the emergence of agile methodologies in 2001, many software companies have shifted to Agile Software Development (ASD), and since then many studies have been conducted to investigate effort estimation within such context; however to date there is no single study that presents a detailed overview of the state of the art in effort estimation for ASD. Objectives: The aim of this study is to provide a detailed overview of the state of the art in the area of effort estimation in ASD. Method: To report the state of the art, we conducted a systematic literature review in accordance with the guidelines proposed in the evidence-based software engineering literature.Results: A total of 25 primary studies were selected; the main findings are: i) Subjective estimation techniques (e.g. expert judgment, planning poker, use case points estimation method) are the most frequently applied in an agile context; ii) Use case points and story points are the most frequently used size metrics respectively; iii) MMRE (Mean Magnitude of Relative Error) and MRE (Magnitude of Relative Error) are the most frequently used accuracy metrics; iv) team skills, prior experience and task size are cited as the three important cost drivers for effort estimation in ASD; and v) Extreme Programming (XP) and SCRUM are the only two agile methods that are identified in the primary studies. Conclusion: Subjective estimation techniques, e.g. expert judgment-based techniques, planning poker or the use case points method, are the one used the most in agile effort estimation studies. As for the size metrics, the ones that were used the most in the primary studies were story points and use case points. Several research gaps were identified, relating to the agile methods, size metrics and cost drivers, thus suggesting numerous possible avenues for future work.