Antidepressant and antipsychotic drugs, predominantly serotonin and/or norepinephrine reuptake inhibitors and dopamine D2-antagonizing antipsychotic compounds, have several limitations. In addition, the exact pathophysiological mechanism leading to serotonergic, noradrenergic and dopaminergic dysfunction in psychotic disorders remains unclear. It has been postulated that an inflammatory mechanism may be involved in the pathogenesis of both depression and psychotic disorders. Furthermore, the differential activation of the enzyme indoleamine 2,3-dioxygenase (IDO) and of the tryptophan/kynurenine metabolic pathway, resulting in the increased production of kynurenic acid in schizophrenia, and a possible increase in quinolinic acid in depression, also may play a key role in these diseases. Such differences are associated with an imbalance in glutamatergic neurotransmission that may contribute to increased levels of NMDA agonism in depression and NMDA antagonism in schizophrenia. In addition, immunological imbalance results in the increased production of PGE2 in schizophrenia and depression, as well as increased COX-2 expression in schizophrenia. Although there is evidence supporting the hypothesis that interactions between immune system components, IDO, the serotonergic system and glutamatergic neurotransmission play a key role in schizophrenia and depression, several gaps in knowledge remain, such as regarding the role of genetics, disease course, gender and different psychopathological states. There is evidence indicating that anti-inflammatory therapy may have beneficial effects in schizophrenia and major depression (MD). COX-2 inhibitors have been tested in animal models and in preliminary clinical trials, demonstrating favorable activity compared with placebo, both in schizophrenia and MD. However, the effects of COX-2 inhibition in the CNS, as well as toward different components of the inflammatory system, kynurenine metabolism and glutamatergic neurotransmission, require further evaluation, which should include clinical trials with larger numbers of patients. The potential inflammatory mechanism in schizophrenia and MD, and the possible therapeutic advantages of targeting this mechanism in the treatment of these disorders is discussed in this review.