Many central nervous system diseases currently lack effective treatment and are often associated with defects in microvascular function, including a failure to match the energy supplied by the blood to the energy used on neuronal computation, or a breakdown of the blood–brain barrier. Pericytes, an under-studied cell type located on capillaries, are of crucial importance in regulating diverse microvascular functions, such as angiogenesis, the blood–brain barrier, capillary blood flow and the movement of immune cells into the brain. They also form part of the “glial” scar isolating damaged parts of the CNS, and may have stem cell-like properties. Recent studies have suggested that pericytes play a crucial role in neurological diseases, and are thus a therapeutic target in disorders as diverse as stroke, traumatic brain injury, migraine, epilepsy, spinal cord injury, diabetes, Huntington’s disease, Alzheimer’s disease, diabetes, multiple sclerosis, glioma, radiation necrosis and amyotrophic lateral sclerosis. Here we report recent advances in our understanding of pericyte biology and discuss how pericytes could be targeted to develop novel therapeutic approaches to neurological disorders, by increasing blood flow, preserving blood–brain barrier function, regulating immune cell entry to the CNS, and modulating formation of blood vessels in, and the glial scar around, damaged regions.