Mental health disorders, including depression and anxiety, are widespread and often inadequately treated due to limitations in current therapeutic approaches, such as poor bioavailability and difficulty in crossing the Blood-Brain Barrier (BBB). Nanotechnology presents a revolutionary solution for enhancing drug delivery and efficacy in mental health treatment. This review explores various nanoformulation strategies, including liposomes, Solid Lipid Nanoparticles (SLNs), polymeric nanoparticles, dendrimers and gold nanoparticles, which facilitate targeted drug delivery and controlled release. These nanocarriers improve therapeutic outcomes by enhancing drug stability, minimizing systemic side effects and ensuring efficient brain targeting. Additionally, novel delivery methods such as intranasal and transdermal systems are discussed for their potential to improve patient compliance. While nanoformulations offer significant advancements, challenges such as scalability, formulation stability and regulatory hurdles must be addressed for clinical translation. Future research should focus on optimizing nanomedicine for personalized mental health care, paving the way for more effective and accessible treatments for depression and anxiety.