<p>Exosomes, small extracellular vesicles (sEVs) that range in Size from 30 to 150 nm in diameter, have emerged as crucial mediators of intercellular communication within the central nervous system (CNS). They play significant roles in the pathogenesis and progression of various neurological and psychiatric disorders, including Alzheimer’s disease, Parkinson’s disease, ischemic stroke, depression, bipolar disorder, and autism spectrum disorder. Exosomes carry a diverse cargo of proteins, nucleic acids, lipids, and other bioactive molecules that can influence neuronal function and synaptic plasticity. In disease states, exosomes derived from stressed neurons or glial cells can propagate neuroinflammation, synaptic dysfunction, and cognitive decline. They may also mediate the spread of abnormal proteins or microRNAs, disrupting neuronal connectivity and neurotransmitter signaling and contributing to the development of proteinopathies and neurotoxicity. Owing to their presence in bodily fluids such as blood plasma, cerebrospinal fluid, and saliva, exosomes hold promise as biomarkers for these disorders. Moreover, their regulatory roles present new opportunities for developing novel diagnostic biomarkers and therapeutic interventions. This review provides an overview of the multifaceted roles of exosomes in neurological and psychiatric disorders. We delve into their contributions to disease pathogenesis, their potential as diagnostic biomarkers, and the innovative therapeutic strategies leveraging exosome-based delivery systems. By exploring the current state of research, we aim to highlight the translational potential of exosomes in revolutionizing the diagnosis and treatment of these disorders.</p>