Herbal medicines are being used since ancient times and are an important part of the alternative and traditional medicinal system. In recent decades, scientists are embracing herbal medicines based on the fact that a number of drugs that are currently in use are derived directly or indirectly from plant sources. Moreover, herbal drugs have lesser side effects, albeit are potentially strong therapeutic agents. The herbal medicine market is estimated to be around US $62 billion globally. Herbal medicine has gained widespread acceptance due to its low toxicity, low cost, ease of accessibility and efficacy in treating difficult diseases. Safety and efficacy are another important factors in the commercialization process of herbal medicines. Nanotechnology has been shown to be potentially effective in improving the bioactivity and bioavailability of herbal medicines. Development of nano-phytomedicines (or by reducing the size of phytomedicine), attaching polymers with phytomedicines and modifying the surface properties of herbal drugs, have increased the solubility, permeability and eventually the bioavailability of herbal formulations. Novel formulations such as niosomes, liposomes, nanospheres, phytosomes etc., can be exploited in this area. This article reviews herbal medicines, which have prominent activity in the Central Nervous System (CNS) disorders and reported nano-phytomedicines based delivery systems.