Increasing evidence suggests estrogen and estrogen signaling pathway disturbances across psychiatric disorders. Estrogens are not only crucial in sexual maturation and reproduction but are also highly involved in a wide range of brain functions, such as cognition, memory, neurodevelopment, and neuroplasticity. To add more, the recent findings of its neuroprotective and anti-inflammatory effects have grown interested in investigating its potential therapeutic use to psychiatric disorders. In this review, we analyze the emerging literature on estrogen receptors and psychiatric disorders in cellular, preclinical, and clinical studies. Specifically, we discuss the contribution of estrogen receptor and estrogen signaling to cognition and neuroprotection via mediating multiple neural systems, such as dopaminergic, serotonergic, and glutamatergic systems. Then, we assess their disruptions and their potential implications for pathophysiologies in psychiatric disorders. Further, in this review, current treatment strategies involving estrogen and estrogen signaling are evaluated to suggest a future direction in identifying novel treatment strategies in psychiatric disorders.