MicroRNAs (miRNAs) represent an important class of small regulatory RNAs that control gene expression posttranscriptionally by targeting mRNAs for degradation or translation inhibition. Early studies have revealed a complex role for miRNAs in major biological processes such as development, differentiation, growth and metabolism. MiR-137 in particular, has been of great interest due to its critical role in brain function and putative involvement in the etiology of both neuropsychiatric disorders and cancer. Several lines of evidence suggest that development, differentiation and maturation of the nervous system is strongly linked to the expression of miR-137 and its regulation of a large number of downstream target genes in various pathways. Dysregulation of this molecule has also been implicated in major mental illnesses through its position in a variant allele highly associated with schizophrenia in the largest mega genome-wide association studies. Interestingly, miR-137 has also been shown to act as a tumor suppressor, with numerous studies finding reduced expression in neoplasia including brain tumor. Restoration of miR-137 expression has also been shown to inhibit cell proliferation, migration and metastasis, and induce cell cycle arrest, differentiation and apoptosis. These properties of miR-137 propose its potential for prognosis, diagnosis and as a therapeutic target for treatment of several human neurological and neoplastic disorders. In this review, we provide details on the discovery, targets, function, regulation and disease involvement of miR-137 with a broad look at recent discovery in this area.