While there has been growth in the literature exploring the governance of artificial intelligence (AI) and recognition of the critical importance of guiding public values, the literature lacks a systematic study focusing on public values as well as the governance challenges and solutions to advance these values. This article conducts a systematic literature review of the relationships between the public sector AI and public values to identify the impacts on public values and the governance challenges and solutions. It further explores the perspectives of U.S. government employees on AI governance and public values via a national survey. The results suggest the need for a broad inclusion of diverse public values, the salience of transparency regarding several governance challenges, and the importance of stakeholder participation and collaboration as governance solutions. This article also explores and reports the nuances in these results and their practical implications.