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Neuropsychiatric and neurodegenerative disorders impose a substantial global health burden, yet progress in mechanism-based therapy remains limited by clinical heterogeneity and an incomplete understanding of disease biology. Emerging evidence implicates ferroptosis-an iron-dependent form of lipid peroxidation-driven cell death-as a shared pathogenic process across primary psychiatric disorders and neurodegenerative diseases with prominent neuropsychiatric features. In this review, we synthesize evidence from major depressive disorder, schizophrenia, substance use disorders, Alzheimer's disease (AD), and Parkinson's disease (PD), highlighting ferroptosis as a common mechanism linking iron dyshomeostasis to neuronal dysfunction. Mechanistically, ferroptosis is organized around three interconnected modules: amino acid metabolism, lipid peroxidation, and iron handling. These pathways converge on mitochondrial dysfunction, oxidative damage, and neuroinflammatory amplification. We further propose that each disorder displays a distinct ferroptosis signature, including dopamine quinone-mediated GPX4 loss in PD, AICD-dependent transcriptional reprogramming in AD, and inflammatory-glutamatergic lowering of the ferroptotic threshold in depression and schizophrenia. Together, these insights position ferroptosis as a candidate framework for biomarker development, patient stratification, and mechanism-informed therapeutic intervention across neuropsychiatric disease.