Depression and schizophrenia are two highly prevalent and severely debilitating neuropsychiatric disorders. Both conventional antidepressant and antipsychotic pharmacotherapies are often inefficient clinically, causing multiple side effects and serious patient compliance problems. Collectively, this calls for the development of novel drug targets for treating depressed and schizophrenic patients. Here, we discuss recent translational advances, research tools and approaches, aiming to facilitate innovative drug discovery in this field. Providing a comprehensive overview of current antidepressants and antipsychotic drugs, we also outline potential novel molecular targets for treating depression and schizophrenia. We also critically evaluate multiple translational challenges and summarize various open questions, in order to foster further integrative cross-discipline research into antidepressant and antipsychotic drug development.