The activity of cytochrome P450 enzymes is influenced by genetic and nongenetic factors; hence, the metabolism of exogenous psychotropic medications and potentially some endogenous neuropeptides is variably affected among different ethnic groups of psychiatric patients. The aim of this review is to highlight the most common cytochrome P450 isoenzymes associated with the metabolism of psychotropic medications (antidepressants, antipsychotics, and mood stabilizers), their variations among different populations, their impact on endogenous neurotransmitters (dopamine and serotonin), and the effect of nongenetic factors, particularly smoking, age, and pregnancy, on their metabolic activity. Furthermore, the adverse effects of psychiatric medications may be associated with certain human leukocytic antigen (HLA) genotypes. We also highlight the gene variants that may potentially increase susceptibility to obesity and metabolic syndrome, as the adverse effects of some psychiatry medications. Collectively, the literature revealed that variation of CYP450 activity is mostly investigated in relation to genetic polymorphism, and is directly correlated with individualized clinical outcomes; whereas adverse effects are associated with HLA variants, projecting the value of pharmacogenetics implementation in psychiatry clinics. Only a few previous studies have discussed the impact of such genetic variations on the metabolism of endogenous neuropeptides. In this review, we also report on the prevalence of key variants in different ethnicities, by demonstrating publicly available data from the 1000 Genomes Project and others. Finally, we highlight the future direction of further investigations to enhance the predictability of the individual gene variants to achieve precision therapies for psychiatric patients.