Psychiatric disorders are among the most debilitating of all medical illnesses. Whilst there are drugs that can be used to treat these disorders, they give sub-optimal recovery in many people and a significant number of individuals do not respond to any treatments and remain treatment resistant. Surprisingly, the mechanism by which psychotropic drugs cause their therapeutic benefits remain unknown but likely involves the underlying molecular pathways affected by the drugs. Hence, in this review, we have focused on recent findings on the molecular mechanism affected by antipsychotic, mood stabilizing and antidepressant drugs at the levels of epigenetics, intracellular signalling cascades and microRNAs. We posit that understanding these important interactions will result in a better understanding of how these drugs act which in turn may aid in considering how to develop drugs with better efficacy or increased therapeutic reach.