The Sega System 16 is an arcade board released by Sega in 1985 as a 16‑bit successor to the Sega System 1 and Sega System 2. Throughout its lifespan, there would be around forty games released on this hardware, making it one of Sega's most successful hardware designs. It was produced in three variants: the Pre-System 16 (1985), System 16A (1986), and System 16B (1987). The only difference between the Pre-System 16 and System 16A are clock speeds, while the System 16B has improved graphics, sound and memory.

The System 16 is the home to many of Sega's most successful franchises, including Shinobi, Fantasy Zone, Altered Beast and Golden Axe. Following the Sega Hang-On hardware, the System 16 popularised the use of the Motorola 68000 and Zilog Z80 combo, which was later imitated for Capcom's successful CPS-1 and CPS-2 boards (among other arcade systems of the day), as well as the Sega Mega Drive and Neo Geo consoles.

In order to prevent piracy, as well as illegal bootleg games, many System 16 boards used an encryption system. A Hitachi FD1094 chip, containing the main CPU as well as the decryption key, was used in place of a regular CPU.

Though Pre-System 16, System 16A and System 16B are the three most recognised variants of the hardware, there is technically a fourth, dubbed "System 16C", which was used by the 2008 release of Fantasy Zone II DX: The Tears of Opa-Opa. Although Fantasy Zone II DX arrived almost a decade and a half after the System 16 hardware was discontinued, its real arcade release means that System 16C specifications may belong to the Sega System 16 series. Fantasy Zone II DX needs more RAM than any of the previous System 16 boards can offer, but otherwise adheres to their limitations.