The evidence base on the relationship between religion and mental health is growing rapidly, and we summarise the latest research on the topic. This includes studies on religious involvement and depression, bipolar disorder, suicide, post-traumatic stress disorder (PTSD), substance use disorders, personality disorder, chronic psychotic disorder, marital/family stability, social support and psychological well-being. We also review a relatively new topic in psychiatry, moral injury, which often accompanies PTSD and may interfere with its treatment. We describe a theoretical model that explains how religion might affect mental health and briefly discuss its applications in clinical practice, including a discussion of religiously integrated therapies for depression, anxiety and other emotional problems. Overall, studies indicate that religious involvement often serves as a powerful resource for patients, one that can be integrated into psychiatric care. At times, however, religion may impede or complicate treatment. This article will help clinicians determine, on the basis of the latest research, whether religion is an asset or a liability for a particular patient.