Translocator protein (TSPO) is an 18 kDa translocator membrane protein expressed in the outer mitochondrial membrane of steroid-synthesizing cells in the central and peripheral nervous systems. TSPO is involved in cellular functions, including the regulation of cell proliferation, transport of cholesterol to the inner mitochondrial membranes of glial cells, regulation of mitochondrial quality control, and haem synthesis. In the brain, TSPO has been extensively used as a biomarker of injury and inflammation. Indeed, TSPO was up-regulated in several inflammatory and neurodegenerative diseases. In contrast, the expression of TSPO was decreased in peripheral blood from psychiatric patients. Since TSPO is involved in several mechanisms related to mitochondrial function and inflammatory alterations, therapeutic approaches focusing on the regulation of TSPO may provide a new avenue for the treatment of neuropsychiatric disorders. Based on the involvement of mitochondrial alterations in the neurobiology of neuropsychiatric disorders, this review will focus on the functions and physiological roles of TSPO and the potential of TSPO ligands as therapeutic strategies for the treatment of neuropsychiatric disorders.