By developing a more comprehensive understanding of the physiological underpinnings of mental illness, precision medicine has the potential to revolutionize psychiatric care. With recent breakthroughs in next-generation multi-omics technologies and data analytics, it is becoming more feasible to leverage multimodal biomarkers, from genetic variants to neuroimaging biomarkers, to objectify diagnostics and treatment decisions in psychiatry and improve patient outcomes. Ongoing work in precision psychiatry will parallel progress in precision oncology and cardiology to develop an expanded suite of blood- and neuroimaging-based diagnostic tests, empower monitoring of treatment efficacy over time, and reduce patient exposure to ineffective treatments. The emerging model of precision psychiatry has the potential to mitigate some of psychiatry's most pressing issues, including improvingdisease classification, lengthy treatment duration, and suboptimal treatment outcomes. This narrative-style review summarizes some of the emerging breakthroughs and recurring challenges in the application of precision medicine approaches to mental healthcare.