About 25 years ago the observation that neuropeptides serve as signalling molecules in the nervous system generated great expectations for drug industry. In this article the progress made since then in exploiting neuropeptide systems pharmacologically in psychiatry is highlighted. In affective disorders a number of neuropeptides seem to be causally involved in development and course of illness, especially corticotropin releasing hormone (CRH), vasopressin (AVP) and substance P, whose receptors are now targeted with small molecules designed to reduce depressive and anxiety symptoms. Although not exactly neuropeptides, also neurotrophins, may have a distinct role in antidepressant action and possibly also in causation of depression. Schizophrenia-like symptoms are caused by neurotensin (NT), supporting the notion that drugs interfering with NT systems are potential antipsychotics. Finally, sleep disorders, currently treated with hypnotics, that have serious adverse effects can be targeted with neuropeptides. According to the work by Axel Steiger several neuropeptides even if peripherally administered produce improvements of quality of sleep. All these observations call for intensified application of novel research tools necessary to exploit the potential of neuropeptide systems as psychopharmaceutical targets.