Scalp psoriasis affects up to 80% of patients with psoriasis and possesses a significant challenge as a difficult-to-treat area. A comprehensive literature search was conducted in PubMed using relevant keywords to identify recent studies focusing on scalp psoriasis diagnosis and treatment. The diagnosis is mainly based on clinical evaluation and trichoscopy. Other diagnostic tools, such as histopathology, optical coherence tomography, reflectance confocal microscopy (RCM) and line-field confocal optical coherence tomography (LC-OCT) may offer valuable insights in doubtful cases. Topical therapies (glucocorticosteroids, a betamethasone-calcipotriol combination or calcineurin inhibitors) remain the first-line therapy for mild to moderate cases. Patients with severe scalp psoriasis and those who do not respond to topical treatment are candidates for systemic therapy, including targeted therapy (interleukin-17 inhibitors, interleukin-23 inhibitors, tumor necrosis alpha inhibitors) or classic treatment (methotrexate, cyclosporine) Recent studies have demonstrated promising outcomes with novel treatments including Janus kinase (JAK) inhibitors and other new small molecules. This review provides updated information focused on diagnostic methods and targeted treatment of scalp psoriasis with relevance to clinical management of patients.