Neuroscientific and clinical studies of music over the past two decades have substantially increased our understanding of its use as a means of therapy. The authors briefly review current literature related to music's effect on people with different mental illnesses, and examine several neurobiological theories that may explain its effectiveness or lack thereof in treating psychiatric disorders. Neuroscientific studies have shown music to be an agent capable of influencing complex neurobiological processes in the brain and suggest that it can potentially play an important role in treatment. Clinical studies provide some evidence that music therapy can be used as an alternative therapy in treating depression, autism, schizophrenia, and dementia, as well as problems of agitation, anxiety, sleeplessness, and substance misuse, though whether it can actually replace other modes of treatment remains undetermined. Future research should include translational studies involving both neuroscience and clinical medicine that investigate the long-term effects of music intervention and that lead to the development of new strategies for music therapy.