Anti-N-methyl-D-aspartate receptor (NMDAR) encephalitis is a potentially life-threatening autoimmune disorder which is strongly associated with ovarian teratomas in young female patients. The primary aim is to highlight the importance of considering NMDAR encephalitis in the differential diagnosis of young female patients presenting with acute or subacute neuropsychiatric symptoms, especially when accompanied by ovarian teratomas. This case report and literature review detail the presentation, diagnosis, and treatment of a 35-year-old G4P3 Indigenous woman who initially presented with neuropsychiatric symptoms and fever, having a history of extensive drug and alcohol use. Misdiagnosed initially, the patient's lack of response to standard treatments led to further investigations, revealing paraneoplastic anti-NMDAR encephalitis secondary to a left ovarian teratoma. The report examines the treatment regimen followed, including prednisolone, intravenous immunoglobulin, rituximab injections, and laparoscopic bilateral salpingo-oophorectomy. This case underscores the critical need for increased clinical vigilance for anti-NMDAR encephalitis in patients, particularly young females, presenting with neuropsychiatric symptoms and potential ovarian teratomas. The literature review accompanying the case report provides valuable insights into the presentation, diagnosis, and management of this complex condition. Lastly, this study emphasised the diagnostic challenges inherent in paraneoplastic neuropsychiatric syndromes, advocating for a multidisciplinary approach in similar clinical scenarios.