Our understanding of neurological diseases has been tremendously enhanced over the past decade by the application of new technologies. Genome-wide association studies have highlighted glial cells as important players in diseases. Single-cell profiling technologies are providing descriptions of disease states of neurons and glia at unprecedented molecular resolution. However, significant gaps remain in our understanding of the mechanisms driving disease-associated cell states, and how these states contribute to disease. These gaps in our understanding can be bridged by CRISPR-based functional genomics, a powerful approach to systematically interrogate gene function. In this review, we will briefly review the current literature on neurological disease-associated cell states and introduce CRISPR-based functional genomics. We discuss how advances in CRISPR-based screens, especially when implemented in the relevant brain cell types or cellular environments, have paved the way towards uncovering mechanisms underlying neurological disease-associated cell states. Finally, we will delineate current challenges and future directions for CRISPR-based functional genomics to further our understanding of neurological diseases and potential therapeutic strategies.