The habenula (Hb) is a central structure connecting forebrain to midbrain regions. This microstructure regulates monoaminergic systems, notably dopamine and serotonin, and integrates cognitive with emotional and sensory processing. Early preclinical data have described Hb as a brain nucleus activated in anticipation of aversive outcomes. Evidence has now accumulated to show that Hb encodes both rewarding and aversive aspects of external stimuli, thus driving motivated behaviors and decision-making. Human Hb research is still nascent but develops rapidly, alongside with the growth of neuroimaging and deep brain stimulation techniques. Not surprisingly Hb dysfunction has been associated with psychiatric disorders, and studies in human patients have established evidence for Hb involvement in major depression, addiction and schizophrenia, as well as in pain and analgesia. Here we summarize current knowledge from animal research, and overview the existing human literature on anatomy and function of the Hb. We also discuss challenges and future directions in targeting this small brain structure in both rodents and humans. By combining animal data and human experimental studies, this review addresses the translational potential of preclinical Hb research.