Schizophrenia and bipolar disorder (BD) are associated with debilitating psychiatric and cognitive dysfunction, worse health outcomes, and shorter life expectancies. The pathophysiological understanding of and therapeutic resources for these neuropsychiatric disorders are still limited. Humans harbor over 1000 unique bacterial species in our gut, which have been linked to both physical and mental/cognitive health. The gut microbiome is a novel and promising avenue to understand the attributes of psychiatric diseases and, potentially, to modify them. Building upon our previous work, this systematic review evaluates the most recent evidence of the gut microbiome in clinical populations with serious mental illness (SMI). Sixteen articles that met our selection criteria were reviewed, including cross-sectional cohort studies and longitudinal treatment trials. All studies reported alterations in the gut microbiome of patients with SMI compared to non-psychiatric comparison subjects (NCs), and beta-diversity was consistently reported to be different between schizophrenia and NCs. Ruminococcaceae and Faecalibacterium were relatively decreased in BD, and abundance of Ruminococcaceae was reported across several investigations of SMI to be associated with better clinical characteristics. Lactic acid bacteria were relatively more abundant in SMI and associated with worse clinical outcomes. There was very limited evidence for the efficacy of probiotic or prebiotic interventions in SMI. As microbiome research in psychiatry is still nascent, the extant literature has several limitations. We critically evaluate the current data, including experimental approaches. There is a need for more unified methodological standards in order to arrive at robust biological understanding of microbial contributions to SMI.