Bacteria in the gut microbiome play an intrinsic part in immune activation, intestinal permeability, enteric reflex, and entero-endocrine signaling. The gut microbiota communicates with the central nervous system (CNS) through the production of bile acids, short-chain fatty acids (SCFAs), glutamate (Glu), γ-aminobutyric acid (GABA), dopamine (DA), norepinephrine (NE), serotonin (5-HT), and histamine. A vast number of signals generated in the gastrointestinal tract (GIT) reach the brain via afferent fibers of the vagus nerve (VN). Signals from the CNS are returned to entero-epithelial cells (EES) via efferent VN fibers and communicate with 100 to 500 million neurons in the submucosa and myenteric plexus of the gut wall, which is referred to as the enteric nervous system (ENS). Intercommunications between the gut and CNS regulate mood, cognitive behavior, and neuropsychiatric disorders such as autism, depression, and schizophrenia. The modulation, development, and renewal of nerves in the ENS and changes in the gut microbiome alter the synthesis and degradation of neurotransmitters, ultimately influencing our mental health. The more we decipher the gut microbiome and understand its effect on neurotransmission, the closer we may get to developing novel therapeutic and psychobiotic compounds to improve cognitive functions and prevent mental disorders. In this review, the intricate control of entero-endocrine signaling and immune responses that keep the gut microbiome in a balanced state, and the influence that changing gut bacteria have on neuropsychiatric disorders, are discussed.