Lipids represent the most abundant molecular type in the brain with a fat content of approximately 60% of the dry brain weight in humans. Despite this fact, little attention has been paid to circumscribe the dynamic role of lipids in brain function and disease. Membrane lipids such as cholesterol, phosphoinositide, sphingolipids, arachidonic acid and endocannabinoids finely regulate both synaptic receptors and ion channels that insure critical neural functions. After a brief introduction on brain lipids and their respective properties, we review here their role in regulating synaptic function and ion channel activity, action potential propagation, neuronal development, functional plasticity and their contribution in the development of neurological and neuropsychiatric diseases. We also provide possible directions for future research on lipid function in brain plasticity and diseases. Clinical highlights. Lipids interact with ion channels and synaptic receptors and thus control neuronal excitability and synaptic transmission. Any dysregulation of these two parameters may lead to the development of some neurological and neuropsychiatric diseases. We review here the role of lipids in neurological diseases such as epilepsy and stroke, and neurodegenerative diseases like amyotrophic lateral sclerosis, Alzheimer's and Parkinson's diseases. We also discuss how lipids may trigger neuropsychiatric diseases such as autism spectrum disorder, depression and posttraumatic stress disorder.