This narrative review explores the transformative impact of Artificial Intelligence (AI) on mental health nursing, particularly in enhancing psychiatric patient care. AI technologies present new strategies for early detection, risk assessment, and improving treatment adherence in mental health. They also facilitate remote patient monitoring, bridge geographical gaps, and support clinical decision-making. The evolution of virtual mental health assistants and AI-enhanced therapeutic interventions are also discussed. These technological advancements reshape the nurse-patient interactions while ensuring personalized, efficient, and high-quality care. The review also addresses AI's ethical and responsible use in mental health nursing, emphasizing patient privacy, data security, and the balance between human interaction and AI tools. As AI applications in mental health care continue to evolve, this review encourages continued innovation while advocating for responsible implementation, thereby optimally leveraging the potential of AI in mental health nursing.