Abstract: Luteolin (3′,4′,5,7-tetrahydroxyflavone) is a naturally occurring flavonoid found in diverse plant families, including Apiaceae, Brassicaceae and Lamiaceae, and is a major bioactive component of Chinese medicines such as Chrysanthemum morifolium and Perilla frutescens. It possesses antidepressant, anti-inflammatory, antioxidant and neuroprotective activities, and has shown therapeutic potential in depression, Alzheimer’s disease (AD) and Parkinson’s disease (PD). Based on a comprehensive PubMed search, this review examines the shared pathological features—neuroinflammation, oxidative stress and synaptic dysfunction—across these three disorders and elucidates the pharmacological actions of luteolin. Clinical trial data were retrieved from NIH and ICTRP registries. We critically analyze current research limitations, including the lack of validated direct targets beyond PPARγ, the predominance of pathway-based evidence without orthogonal validation, and significant pharmacokinetic defects (low oral bioavailability, rapid glucuronidation, poor BBB penetration). While luteolin holds promise for central nervous system (CNS) disorders, its clinical translation requires advanced drug delivery systems (e.g., nano-formulations, brain-region-specific prodrugs), combination therapies or structural modification, and future cohort studies for prophylactic use. Addressing these priorities will be essential for its therapeutic development.