Molecular medical research on aromatherapy has been steadily increasing for use as an adjuvant therapy in managing psychiatric disorders and to examine its therapeutic mechanisms. Most studies, as well as clinically applied experience, have indicated that various essential oils, such as lavender, lemon and bergamot can help to relieve stress, anxiety, depression and other mood disorders. Most notably, inhalation of essential oils can communicate signals to the olfactory system and stimulate the brain to exert neurotransmitters (e.g. serotonin and dopamine) thereby further regulating mood. However, little research has been done on the molecular mechanisms underlying these effects, thus their mechanism of action remains ambiguous. Several hypotheses have been proposed regarding the therapeutic mechanism of depression. These have mainly centered on possible deficiencies in monoamines, neurotrophins, the neuroendocrine system, c-AMP, cation channels as well as neuroimmune interactions and epigenetics, however the precise mechanism or mechanisms related to depression have yet to be elucidated. In the current study, the effectiveness of aromatherapy for alleviating psychiatric disorders was examined using data collected from previously published studies and our unpublished data. A possible signaling pathway from olfactory system to the central nerve system and the associated key molecular elements of aromatherapy are also proposed.