Bile acids (BA) are important physiological molecules not only mediating nutrients absorption and metabolism in peripheral tissues, but exerting neuromodulation effect in the central nerve system (CNS). The catabolism of cholesterol to BA occurs predominantly in the liver by the classical and alternative pathways, or in the brain initiated by the neuronal-specific enzyme CYP46A1 mediated pathway. Circulating BA could cross the blood brain barrier (BBB) and reach the CNS through passive diffusion or BA transporters. Brain BA might trigger direct signal through activating membrane and nucleus receptors or affecting activation of neurotransmitter receptors. Peripheral BA may also provide the indirect signal to the CNS via farnesoid X receptor (FXR) dependent fibroblast growth factor 15/19 (FGF15/19) pathway or takeda G protein coupled receptor 5 (TGR5) dependent glucagon-like peptide-1 (GLP-1) pathway. Under pathological conditions, alterations in BA metabolites have been discovered as potential pathogenic contributors in multiple neurological disorders. Attractively, hydrophilic ursodeoxycholic acid (UDCA), especially tauroursodeoxycholic acid (TUDCA) can exert neuroprotective roles by attenuating neuroinflammation, apoptosis, oxidative or endoplasmic reticulum stress, which provides promising therapeutic effects for treatment of neurological diseases. This review summarizes recent findings highlighting the metabolism, crosstalk between brain and periphery, and neurological functions of BA to elucidate the important role of BA signaling in the brain under both physiological and pathological conditions.