Research suggests that inflammation is important in the pathophysiology of mental disorders. In addition, a growing body of evidence has led to the concept of the microbiota-gut-brain axis. To understand the potential interactions, we begin by exploring the liaison between the immune system and mental disorders, then we describe the evidence that the microbiota impact the immune response in the developing brain. Next, we review the literature that has documented microbiome alterations in major mental disorders. We end with a summary of therapeutic applications, ranging from psycho-biotics to immunomodulatory drugs that could affect the microbiota-gut-brain axis, and potential treatments to alleviate the adverse effects of antipsychotics. We conclude that there is promising evidence to support the position that the microbiota plays an important role in the immunological pathophysiology of mental disorders with an emphasis on psychotic disorders and mood disorders. However, more research is needed to elucidate the mechanisms.