Emil Kraepelin, the founder of modern psychiatric classification, and the Nobel laureate Julius Wagner von Jauregg highlighted the role of infections and the immune system in psychiatric disorders. It is well known that infections can trigger various psychiatric syndromes and influence the course of psychiatric disorders. Psychiatric symptoms during virulent infections, often presenting as encephalitis or meningitis, normally are diagnosed as mental disorders due to a general medical condition. On the other hand, an expanding research field underpins the view that infections and activation of the immune system may play a causative role in major psychiatric disorders such as schizophrenia or major depression. Also in other psychiatric syndromes, such as Tourette's syndrome, inflammation - partially based on infections - is involved. For this mild smoldering inflammatory process, the ‘mild (chronic) encephalitis' concept was developed. In this chapter, findings related to immune activation and inflammation in schizophrenia, major depression and Tourette's syndromes as examples for this concept are described. Moreover, encouraging results from randomized clinical trials in schizophrenia and major depression showing a benefit of anti-inflammatory therapy in these psychiatric disorders are discussed as examples for immunomodulating treatment approaches in psychiatric disorders. Further immunotherapies used in Tourette's syndrome or pediatric autoimmune disorders associated with streptococci are highlighted as further examples for such a therapeutic approach.