Background: The ketogenic diet (KD) has become widespread for the therapy of epileptic pathology in childhood and adulthood. In the last few decades, the current re-emergence of its popularity has focused on the treatment of obesity and diabetes mellitus. KD also exerts anti-inflammatory and neuroprotective properties, which could be utilized for the therapy of neurodegenerative and psychiatric disorders. Purpose: This is a thorough, scoping review that aims to summarize and scrutinize the currently available basic research performed in in vitro and in vivo settings, as well as the clinical evidence of the potential beneficial effects of KD against neurodegenerative and psychiatric diseases. This review was conducted to systematically map the research performed in this area as well as identify gaps in knowledge. Methods: We thoroughly explored the most accurate scientific web databases, e.g., PubMed, Scopus, Web of Science, and Google Scholar, to obtain the most recent in vitro and in vivo data from animal studies as well as clinical human surveys from the last twenty years, applying effective and characteristic keywords. Results: Basic research has revealed multiple molecular mechanisms through which KD can exert neuroprotective effects, such as neuroinflammation inhibition, decreased reactive oxygen species (ROS) production, decreased amyloid plaque deposition and microglial activation, protection in dopaminergic neurons, tau hyper-phosphorylation suppression, stimulating mitochondrial biogenesis, enhancing gut microbial diversity, restoration of histone acetylation, and neuron repair promotion. On the other hand, clinical evidence remains scarce. Most existing clinical studies are modest, frequently uncontrolled, and merely assess the short-term impacts of KD. Moreover, several clinical studies had large dropout rates and a considerable lack of compliance assessment, as well as an increased level of heterogeneity in the study design and methodology. Conclusions: KD can exert substantial neuroprotective effects via multiple molecular mechanisms in various neurodegenerative and psychiatric pathological states. Large, long-term, randomized, double-blind, controlled clinical trials with a prospective design are strongly recommended to delineate whether KD may attenuate or even treat neurodegenerative and psychiatric disease development, progression, and symptomatology.