Emerging theories emphasize the crucial role of allostasis (anticipatory and adaptive regulation of the body's biological processes) and interoception (integration, anticipation, and regulation of internal bodily states) in adjusting physiological responses to environmental and bodily demands. In this review, we explore the disruptions in integrated allostatic interoceptive mechanisms in psychiatric and neurological disorders, including anxiety, depression, Alzheimer's disease, and frontotemporal dementia. We assess the biological mechanisms associated with allostatic interoception, including whole-body cascades, brain structure and function of the allostatic interoceptive network, heart-brain interactions, respiratory-brain interactions, the gut-brain-microbiota axis, peripheral biological processes (inflammatory, immune), and epigenetic pathways. These processes span psychiatric and neurological conditions and call for developing dimensional and transnosological frameworks. We synthesize new pathways to understand how allostatic interoceptive processes modulate interactions between environmental demands and biological functions in brain disorders. We discuss current limitations of the framework and future transdisciplinary developments. This review opens a new research agenda for understanding how allostatic interoception involves brain predictive coding in psychiatry and neurology, allowing for better clinical application and the development of new therapeutic interventions.