Mental health disorders like depression, anxiety, post-traumatic stress disorder (PTSD), and schizophrenia significantly reduce the daily functioning and quality of life of individuals. Traditional treatments often fall short, thus opening interest in complementary therapies like animal assisted therapy (AAT) which encourages the human-animal bond and gives emotional and psychological support. This review evaluated the efficacy of AAT in treating mental health disorders, and understanding its mechanisms and benefits. A comprehensive literature review was conducted (using databases such as PubMed, Google Scholar, and ResearchGate) focused on peer-reviewed articles, systematic reviews and meta-analyses published in the last 2 decades. Studies indicated that AAT improved mental health outcomes for people with depression, anxiety, PTSD, and schizophrenia. Interaction with therapy animals reduced cortisol levels, increased oxytocin, lowered blood pressure, and increased social engagement and emotional regulation. Benefits included reduced symptoms of depression, anxiety, PTSD, and improved social functioning and quality of life. AAT offered a complementary treatment for mental health disorders, providing emotional comfort, improving mood, and serving as a nonpharmacological option for individuals. However, challenges such as individual preferences, allergies, ethical concerns for therapy animals, and logistical issues must be addressed. Future research should focus on the long-term effects and mechanisms involved to optimize the application of AAT in the clinical setting, and alternatives like robotic companion pets could also be explored.