Phelan-McDermid syndrome or 22q13.3 deletion syndrome is a rare neurodevelopmental disorder characterized by generalized developmental delay, intellectual disability, absent or delayed speech, seizures, autism spectrum disorder, neonatal hypotonia, physical dysmorphic features, and recurrent medical comorbidities. Individuals with Phelan-McDermid syndrome have terminal deletions of the chromosomal region 22q13.3 encompassing SHANK3, a gene encoding a structural component of excitatory synapses indispensable for proper synaptogenesis and neuronal physiology, or point mutations within the gene. Here, we review the clinical aspects of the syndrome and the genetic findings shedding light onto the underlying etiology. We also provide an overview on the evidence from genetic studies and mouse models that supports SHANK3 haploinsufficiency as a major contributor of the neurobehavioral manifestations of Phelan-McDermid syndrome. Finally, we discuss how all these discoveries are uncovering the pathophysiology of Phelan-McDermid syndrome and are being translated into clinical trials for novel therapeutics ameliorating the core symptoms of the disorder.