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In recent years, with rapid development of technology of regenerative medicine and tissue engineering, brain organoids, as an innovative in vitro model system, have become a hot spot in neuroscience research and drug development. Brain organoids simulate the complex structure and function of the human brain in terms of reproducing key processes of brain development in vitro, providing an unprecedented platform for understanding the mechanisms of neurological diseases and of evaluating drug efficacy and toxicity. This review summarizes the latest research progress in brain organoid technology, particularly its application in drug development and in exploring challenges and orientation of future development.