Background Trefoil factor 3 (TFF3), a naturally occurring cysteine-rich tripeptide in mammals, is predominantly expressed in the goblet cells of the small intestine and colon. As a member of the neuropeptide family, TFF3 has been implicated in a broad spectrum of physiological and pathological processes. Extensive research has demonstrated its involvement in the etiology, progression, and prognosis of eight major categories of human diseases, including those affecting the nervous, digestive, and respiratory systems, with expression levels being modulated in response to different pathological conditions. Purpose This review aims to provide a comprehensive overview of TFF3’s pathological functions across various human diseases, with a particular focus on neurological and psychiatric disorders. We also investigate the associated proteins and signaling pathways that mediate TFF3’s biological activities, in order to establish a theoretical basis for its potential clinical application and identify it as a promising therapeutic target for neuropsychiatric diseases. Results TFF3 has been shown to play a critical role in the pathogenesis of several disease conditions, particularly in the central nervous system. Its capacity to interact with specific receptors and modulate signaling pathways underscores its potential as a key molecule in the development of novel therapeutic strategies. Recent studies on TFF3’s mechanisms of action in neurological disorders highlight its importance as a drug target, with evidence suggesting its involvement in neuroprotection, inflammation, and neuronal repair. These findings contribute to a growing body of literature that positions TFF3 as a versatile and multifunctional peptide with significant therapeutic potential. Conclusion This review highlights the significance of TFF3 as a therapeutic target and underscores the need for further investigation into its molecular mechanisms to facilitate its application in clinical settings.