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It has been found that soluble epoxide hydrolase (sEH; encoded by the <i>EPHX2</i> gene) in the metabolism of polyunsaturated fatty acids (PUFAs) plays a key role in inflammation, which, in turn, plays a part in the pathogenesis of neuropsychiatric disorders. Meanwhile, epoxy fatty acids such as epoxyeicosatrienoic acids (EETs), epoxyeicosatetraenoic acids (EEQs), and epoxyeicosapentaenoic acids (EDPs) have been found to exert neuroprotective effects in animal models of neuropsychiatric disorders through potent anti-inflammatory actions. Soluble expoxide hydrolase, an enzyme present in all living organisms, metabolizes epoxy fatty acids into the corresponding dihydroxy fatty acids, which are less active than the precursors. In this regard, preclinical findings using sEH inhibitors or <i>Ephx2</i> knock-out (KO) mice have indicated that the inhibition or deficiency of sEH can have beneficial effects in several models of neuropsychiatric disorders. Thus, this review discusses the current findings of the role of sEH in neuropsychiatric disorders, including depression, autism spectrum disorder (ASD), schizophrenia, Parkinson’s disease (PD), and stroke, as well as the potential mechanisms underlying the therapeutic effects of sEH inhibitors.