Cannabidiol (CBD) is a non-psychotomimetic phytocannabinoid derived from Cannabis sativa. It has possible therapeutic effects over a broad range of neuropsychiatric disorders. CBD attenuates brain damage associated with neurodegenerative and/or ischemic conditions. It also has positive effects on attenuating psychotic-, anxiety- and depressive-like behaviors. Moreover, CBD affects synaptic plasticity and facilitates neurogenesis. The mechanisms of these effects are still not entirely clear but seem to involve multiple pharmacological targets. In the present review, we summarized the main biochemical and molecular mechanisms that have been associated with the therapeutic effects of CBD, focusing on their relevance to brain function, neuroprotection and neuropsychiatric disorders.