This review focus on the terpenoids as potential therapeutic agents for depression and anxiety disorders, which naturally found in a variety of plants and exhibit a wide range of biological activities. Among the terpenoids discussed in this review are α‐pinene, β‐caryophyllene, α‐phellandrene, limonene, β‐linalool, 1, 8‐cineole, β‐pinene, caryophyllene oxide, p‐cymene, and eugenol. All of these compounds have been studied extensively regarding their pharmacological properties, such as neuroprotective effect, anti‐inflammation, antibacterial, regulation of neurotransmitters and antioxidant effect. Preclinical evidence are reviewed to highlight their diverse mechanisms of action and therapeutic potential to support antidepressant and anxiolytic properties. Additionally, challenges and future directions are also discussed to emphasize therapeutic utility of terpenoids for mental health disorders. Overall, this review provides a promising role of terpenoids as novel therapeutic agents for depression and anxiety, with potential implications for the development of more effective and well‐tolerated treatments in the field of psychopharmacology.