Steroids are beneficial in neurological illness, but have many serious side effects. Having observed several patients with severe steroid psychoses, which greatly prolonged their hospitalizations, the authors sought to improve understanding of this entity. A literature review was conducted. The incidence of severe psychiatric symptoms was estimated in a meta-analysis of 2,555 patients to be 5.7 % and the incidence of any psychiatric symptoms was 18.6 % in patients receiving >80 mg/day of prednisone (12 mg/day dexamethasone). Dose is not predictive of time of onset, severity, type, or duration of symptoms. Symptoms can develop rapidly following exposure to even low doses and with oral, epidural, or intra-articular administration. Glucocorticoid effects on the brain fall into three categories: genomic, non-genomic, and neurotrophic/neurotoxic and can be permanent. Excessive glucocorticoid exposure may result in decreased production of endogenous neurosteroid molecules, resulting in unopposed glucocorticoid effects. Treatment includes early recognition, steroid withdrawal when appropriate, reduction in stimulation, and medication. Atypical antipsychotics like olanzapine and risperidone may cause fewer dystonic reactions and extrapyramidal symptoms than typical antipsychotics like haloperidol, and therefore, are often recommended as first line treatment. Steroids are powerful medications with many undesirable side effects. They should be used with caution. More research is needed on their effects on the human central nervous system.