Epidemiologic and genetic studies suggest common environmental and genetic risk factors for a number of psychiatric disorders, including depression, bipolar disorder, and schizophrenia. Genetic and environmental factors, especially adverse life events, not only have main effects on disease development but also may interact to shape risk and resilience. Such gene by adversity interactions have been described for FKBP5, an endogenous regulator of the stress-neuroendocrine system, conferring risk for a number of psychiatric disorders. In this review, we present a molecular and cellular model of the consequences of FKBP5 by early adversity interactions. We illustrate how altered genetic and epigenetic regulation of FKBP5 may contribute to disease risk by covering evidence from clinical and preclinical studies of FKBP5 dysregulation, known cell-type and tissue-type expression patterns of FKBP5 in humans and animals, and the role of FKBP5 as a stress-responsive molecular hub modulating many cellular pathways. FKBP5 presents the possibility to better understand the molecular and cellular factors contributing to a disease-relevant gene by environment interaction, with implications for the development of biomarkers and interventions for psychiatric disorders