Canavan disease is an autosomal recessive and lethal neurological disorder, characterized by the spongy degeneration of the white matter in the brain. The disease is caused by a deficiency of the cytosolic aspartoacylase (ASPA) enzyme, which catalyzes the hydrolysis of N-acetyl-aspartate (NAA), an abundant brain metabolite, into aspartate and acetate. On the physiological level, the mechanism of pathogenicity remains somewhat obscure, with multiple, not mutually exclusive, suggested hypotheses. At the molecular level, recent studies have shown that most disease linked ASPA gene variants lead to a structural destabilization and subsequent proteasomal degradation of the ASPA protein variants, and accordingly Canavan disease should in general be considered a protein misfolding disorder. Here, we comprehensively summarize the molecular and cell biology of ASPA, with a particular focus on disease-linked gene variants and the pathophysiology of Canavan disease. We highlight the importance of high-throughput technologies and computational prediction tools for making genotype–phenotype predictions as we await the results of ongoing trials with gene therapy for Canavan disease.