Despite deep brain stimulation’s positive early results in psychiatric disorders, well-designed clinical trials have yielded inconsistent clinical outcomes. One path to more reliable benefit is closed-loop therapy: stimulation that is automatically adjusted by a device or algorithm in response to changes in the patient’s electrical brain activity. These interventions may provide more precise and patient-specific treatments. In this article, we first introduce the available closed-loop neuromodulation platforms, which have shown clinical efficacy in epilepsy and strong early results in movement disorders. We discuss the strengths and limitations of these devices in the context of psychiatric illness. We then describe emerging technologies to address these limitations, including pre-clinical developments such as wireless deep neurostimulation and genetically targeted neuromodulation. Finally, we discuss ongoing challenges and limitations for closed-loop psychiatric brain stimulation development, most notably the difficulty of identifying meaningful biomarkers for titration. We consider this in the recently-released Research Domain Criteria (RDoC) framework and describe how neuromodulation and RDoC are jointly very well suited to address the problem of treatment-resistant illness.