Circular RNAs (circRNAs) are a unique class of endogenous, single-stranded non-coding RNAs characterized by a covalently closed circular structure. They exhibit tissue-specific expression patterns and have been implicated in the pathogenesis of a wide range of diseases. In the brain, circRNAs are abundantly expressed and evolutionarily conserved, where they play critical roles in neurodevelopment, neuronal differentiation, and synaptic plasticity. Recent studies have revealed that circRNAs are broadly expressed across eukaryotic species and display distinct expression profiles associated with various pathological conditions, particularly neuropsychiatric disorders. However, despite the identification of thousands of circRNAs through high-throughput sequencing technologies, only a small subset has been functionally characterized. In this review, we underscore the emerging significance of circRNAs in neurological and psychiatric disorders. Their exceptional stability and diverse modes of action suggest that circRNAs could serve as key nodes within future precision medicine frameworks. Nevertheless, progress toward clinical translation is currently limited by incomplete mechanistic understanding, small study cohorts, and persistent challenges in therapeutic development. To overcome these barriers, more systematic, large-scale, and mechanism-driven investigations, coupled with innovative strategies and technologies, will be required to fully realize the clinical potential of circRNAs.