Psychiatric disorders remain a major global health concern, with complex diagnostic criteria and a lack of clear biological markers that continue to challenge therapeutic strategies. Current treatment methods, such as psychotherapy, brain stimulation therapy, and pharmacological interventions, often come with their own set of side effects, thus warranting the need to explore alternative approaches. Emerging research highlights the gut brain axis (GBA) and gut microbiota (GM) as key modulators of brain health and disease. Dysbiosis, a disruption in gut microbial composition, can influence blood brain barrier (BBB) integrity, immune signaling, and microbial metabolite production, collectively modulating neuroimmune homeostasis and contributing to the onset of neuroinflammation. While growing preclinical and clinical evidence links altered GM to depression, anxiety, schizophrenia, bipolar disorder (BD), and autism spectrum disorder (ASD), causal relationships remain incompletely defined. This review examines the established and emerging mechanisms connecting the GM to neuroinflammation underlying psychiatric disorders and evaluates current microbiome targeted interventions, such as diet based strategies, probiotics, next generation probiotics (NGPs), and fecal microbiota transplantation (FMT). We also discuss speculative microbiome engineering approaches and highlight translational limitations that must be addressed before clinical implementation. A holistic approach integrating these strategies with conventional psychiatric treatments could facilitate more effective and personalized interventions.