Neuropsychiatric disorders are a collective of cerebral conditions with a multifactorial and polygenetic etiology. Dysregulation of epigenetic profiles in the brain is considered to play a critical role in the development of neuropsychiatric disorders. SET domain, bifurcate 1 (SETDB1), functioning as a histone H3K9 specific methyltransferase, is not only critically involved in transcriptional silencing and local heterochromatin formation, but also affects genome-wide neuronal epigenetic profiles and is essential for 3D genome integrity. Here, we provide a review of recent advances towards understanding the role of SETDB1 in the central nervous system during early neurodevelopment as well as in the adult brain, with a particular focus on studies that link its functions to neuropsychiatric disorders and related behavioral changes, and the exploration of novel therapeutic strategies targeting SETDB1.