Neuromelanin-sensitive MRI is a burgeoning non-invasive neuroimaging method with an increasing number of applications in psychiatric research. This MRI modality is sensitive to the concentration of neuromelanin, which is synthesized from intracellular catecholamines and accumulates in catecholaminergic nuclei including the dopaminergic substantia nigra and the noradrenergic locus coeruleus. Emerging data suggest the utility of neuromelanin-sensitive MRI as a proxy measure for variability in catecholamine metabolism and function, even in the absence of catecholaminergic cell loss. Given the importance of catecholamine function to several psychiatric disorders and their treatments, neuromelanin-sensitive MRI is ideally positioned as an informative and easy-to-acquire catecholaminergic index. In this review paper, we examine basic aspects of neuromelanin and neuromelanin-sensitive MRI and focus on its psychiatric applications in the contexts of mechanistic research and biomarker development. We discuss ongoing debates and state-of-the-art research into the mechanisms of the neuromelanin-sensitive MRI contrast, standardized protocols and optimized analytic approaches, and application of cutting-edge methods such as machine learning and artificial intelligence to enhance the feasibility and predictive power of neuromelanin-sensitive-MRI-based tools. We finally lay out important future directions to allow neuromelanin-sensitive-MRI to fulfill its potential as a key component of the research, and ultimately clinical, toolbox in psychiatry.