Recombinant antibody fragments are promising alternatives to full-length immunoglobulins, creating big opportunities for the pharmaceutical industry. Nowadays, antibody fragments such as antigen-binding fragments (Fab), single-chain fragment variable (scFv), single-domain antibodies (sdAbs), and bispecific antibodies (bsAbs) are being evaluated as diagnostics or therapeutics in preclinical models and in clinical trials. Immunotherapy approaches, including passive transfer of protective antibodies, have shown therapeutic efficacy in several animal models of Alzheimer’s disease (AD), Parkinson’s disease (PD), frontotemporal dementia (FTD), Huntington’s disease (HD), transmissible spongiform encephalopathies (TSEs) and multiple sclerosis (MS). There are various antibodies approved by the Food and Drug Administration (FDA) for treating multiple sclerosis and two amyloid beta-specific humanized antibodies, Aducanumab and Lecanemab, for AD. Our previous review summarized data on recombinant antibodies evaluated in pre-clinical models for immunotherapy of neurodegenerative diseases. Here, we explore recent studies in this fascinating research field, give an update on new preventive and therapeutic applications of recombinant antibody fragments for neurological disorders and discuss the potential of antibody fragments for developing novel approaches for crossing the blood-brain barrier (BBB) and targeting cells and molecules of interest in the brain.