<p>Neuropsychiatric disorders (NPDs) are complex illnesses with poorly understood neurological issues. The general health of persons who suffer from NPDs is severely compromised, as is their ability to learn and function as adults and children. NPDs such as depression, epilepsy, schizophrenia, bipolar disorder, and anxiety disorders present serious public health issues because of their high frequency and intricate pathophysiology. The main mechanisms underlying NPDs are imbalances in neurotransmitter systems, abnormalities in brain circuitry, genetic variations, epigenetic modifications, and interactions with the environment. These factors result in altered neural function, which is manifested in behavioral and cognitive symptoms. Numerous traditional therapies, including Cognitive behavioural therapy (CBT), Electroconvulsive therapy (ECT), and others, are accessible for NPDs. Still, poor drug bioavailability, systemic side effects, and challenges crossing the blood–brain barrier (BBB) are common limitations of conventional treatments, which can result in less-than-ideal therapeutic outcomes. Novel drug delivery systems (NDDS) have shown promise in recent years as approaches to improve patient adherence, targeting, and therapeutic efficacy. Intranasal administration, liposomes, polymeric micelles, transdermal formulations, nanoparticle-based delivery, and other innovations enhance medication bioavailability and BBB penetration while reducing systemic toxicity. Neuropsychiatric treatment paradigms are also evolving due to advancements in nanotechnology, individualized medicine, and controlled medication release mechanisms. This review examines current developments in NDDS for neuropsychiatric illnesses, emphasizing the benefits, difficulties, and potential applications.</p> Graphical Abstract <p></p>