Rapid progress in nanotechnology has advanced fundamental neuroscience and innovative treatment using combined diagnostic and therapeutic applications. The atomic scale tunability of nanomaterials, which can interact with biological systems, has attracted interest in emerging multidisciplinary fields. Graphene, a two-dimensional nanocarbon, has gained increasing attention in neuroscience due to its unique honeycomb structure and functional properties. Hydrophobic planar sheets of graphene can be effectively loaded with aromatic molecules to produce a defect-free and stable dispersion. The optical and thermal properties of graphene make it suitable for biosensing and bioimaging applications. In addition, graphene and its derivatives functionalized with tailored bioactive molecules can cross the blood–brain barrier for drug delivery, substantially improving their biological property. Therefore, graphene-based materials have promising potential for possible application in neuroscience. Herein, we aimed to summarize the important properties of graphene materials required for their application in neuroscience, the interaction between graphene-based materials and various cells in the central and peripheral nervous systems, and their potential clinical applications in recording electrodes, drug delivery, treatment, and as nerve scaffolds for neurological diseases. Finally, we offer insights into the prospects and limitations to aid graphene development in neuroscience research and nanotherapeutics that can be used clinically.