Sexual and gender minority (SGM) individuals experience significantly higher levels of depression, anxiety, and behavioral comorbidities (i.e., substance use, suicide) compared to heterosexual and cisgender individuals. LGBTQ-affirmative psychotherapy aims to ameliorate the adverse psychosocial processes, ultimately caused by stigma, that underlie this disparity. Over the past two decades, the mental health field has introduced professional guidelines and treatment protocols for LGBTQ-affirmative psychotherapy, and established their efficacy across distinct SGM populations, delivery modalities, and settings. This state of the science review outlines the history, current evidence, and future directions of LGBTQ-affirmative psychotherapy. It provides an historical account of clinically relevant research for SGM populations and outlines the factors that moved the field from pathologizing perspectives to affirmative approaches. It then discusses the current evidence for LGBTQ-affirmative psychotherapy, as well as studies identifying treatment moderators, including race/ethnicity and stigma exposure, as well as potential treatment mechanisms, including hypervigilance, shame, negative self-schemas, unassertiveness, and emotion dysregulation. SGM individuals can only benefit from LGBTQ-affirmative psychotherapy if protocols are widely available and used by therapists. To this end, the article presents current findings on implementation and dissemination, such as therapist training, and different treatment delivery modalities. Finally, the article outlines an agenda for future research to advance the field of LGBTQ-affirmative psychotherapy, including identifying treatment mechanisms, successfully implementing and disseminating treatment protocols, determining which contexts and client characteristics warrant adaptations to current protocols, and understanding how LGBTQ-affirmative psychotherapy can interact with structural and systemic conditions to exert the strongest possible impact on SGM mental health.