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This comprehensive review examines psychobiotics, defined as live microorganisms that confer mental health benefits when administered in adequate amounts. The article explores the mechanisms through which psychobiotics influence the gut-brain axis, including microbiota modulation, neurotransmitter production, anti-inflammatory effects, HPA axis regulation, and immune system modulation. Evidence from randomized controlled trials, meta-analyses, and systematic reviews demonstrates psychobiotics’ therapeutic potential in various mental health conditions, including depression, anxiety, Alzheimer’s disease, Parkinson’s disease, autism spectrum disorders (ASD), and attention deficit hyperactivity disorder (ADHD). Clinical studies show significant improvements in cognitive function, mood regulation, and stress response following psychobiotic intervention. The review particularly emphasizes their role in managing neurodegenerative diseases and neurodevelopmental disorders, highlighting both established mechanisms and emerging therapeutic applications.