Research in the area of herbal psychopharmacology has increased markedly over the past decades. To date however, a comprehensive review of herbal antidepressant, anxiolytic and hypnotic psychopharmacology and applications in depression, anxiety and insomnia has been absent. A search of MEDLINE (PubMed), CINAHL, PsycINFO, and the Cochrane Library databases was conducted (up to February 21st 2011) on commonly used psychotropic herbal medicines. A review of the literature was conducted to ascertain mechanisms of action of these botanicals, in addition to a systematic review of controlled clinical trials for treatment of mood, anxiety and sleep disorders, which are common comorbid psychiatric disorders. Specific emphasis was given to emerging phytomedicines. Analysis of evidence levels was conducted, as were effect sizes (Cohen’s d) where data were available. Results provided evidence of a range of neurochemical, endocrinological, and epigenetic effects for 21 individual phytomedicines, which are detailed in this paper. Sixty six controlled studies were located involving eleven phytomedicines. Several of these provide a high level of evidence, such as Hypericum perforatum for major depression, and Piper methysticum for anxiety disorders. Several human clinical trials provide preliminary positive evidence of antidepressant effects (Echium amoenum, Crocus sativus, and Rhodiola rosea) and anxiolytic activity (Matricaria recutita, Ginkgo biloba, Passiflora incanata, E. amoenum, and Scutellaria lateriflora). Caution should however be taken when interpreting the results as many studies have not been replicated. Several herbal medicines with in vitro and in vivo evidence are currently unexplored in human studies, and along with use of emerging genetic technologies “herbomics”, are areas of potential future research.