Pharmacogenetics (PGx) focuses on examining and applying how genetic variability between individuals affects medication outcomes. By analyzing a patient’s variation in genes linked to drug processing, PGx testing offers the potential to customize treatment in primary care and move beyond the traditional generalized prescribing model. In psychiatry, the use of PGx has produced encouraging findings, demonstrating improvements in therapeutic success as well as reductions in drug toxicity and adverse reactions. Although randomized controlled studies support its clinical value, numerous challenges still restrict its adoption. This review explores the use of PGx-informed decision-making for mental health management, with particular emphasis on treatment in children and young adults. In addition, it considers the clinical use of PGx testing, the concerns surrounding its introduction into youth psychiatric settings, and the obstacles that limit its routine integration in healthcare systems. Overall, this paper offers an extensive synthesis of current knowledge and applications of PGx in psychiatric medicine while highlighting the potential of genetic data to enhance individualized treatment for youth experiencing mental health disorders.