Interleukin (IL)-38 is a newly discovered cytokine of the IL-1 family, which binds various receptors (i.e., IL-36R, IL-1 receptor accessory protein-like 1, and IL-1R1) in the central nervous system (CNS). The hallmark physiological function of IL-38 is competitive binding to IL-36R, as does the IL-36R antagonist. Emerging research has shown that IL-38 is abnormally expressed in the serum and brain tissue of patients with ischemic stroke (IS) and autism spectrum disorder (ASD), suggesting that IL-38 may play an important role in neurological diseases. Important advances include that IL-38 alleviates neuromyelitis optica disorder (NMOD) by inhibiting Th17 expression, improves IS by protecting against atherosclerosis via regulating immune cells and inflammation, and reduces IL-1β and CXCL8 release through inhibiting human microglial activity post-ASD. In contrast, IL-38 mRNA is markedly increased and is mainly expressed in phagocytes in spinal cord injury (SCI). IL-38 ablation attenuated SCI by reducing immune cell infiltration. However, the effect and underlying mechanism of IL-38 in CNS diseases remain inadequately characterized. In this review, we summarize the biological characteristics, pathophysiological role, and potential mechanisms of IL-38 in CNS diseases (e.g., NMOD, Alzheimer's disease, ASD, IS, TBI, and SCI), aiming to explore the therapeutic potential of IL-38 in the prevention and treatment of CNS diseases.