This article describes recent progress towards validation of the N-methyl-D-aspartate (NMDA) receptor hypofunction hypothesis of schizophrenia in preclinical models. Schizophrenia, a complex disease characterized by positive, negative and cognitive symptoms, affects 1% of the world population and requires lifelong, daily maintenance therapy. For the last several decades, thinking in this field has been dominated by the hypothesis that hyperfunction of dopamine pathways played a key role in schizophrenia. However, the therapeutic agents developed from this hypothesis have a slow onset of action and tend to improve only the positive symptoms of the disease. The NMDA receptor antagonist PCP has been shown to induce the positive, negative and cognitive symptoms of schizophrenia in healthy patients and cause a resurgence of symptoms in stable patients. These observations led to the NMDA receptor hypofunction hypothesis as an alternative theory for the underlying cause of schizophrenia. According to this hypothesis, any agent that can potentiate NMDA receptor currents has the potential to ameliorate the symptoms of schizophrenia. To date, NMDA receptor currents can be modulated by either direct action on modulatory sites on the NMDA receptor (i.e., the glycine co-agonist binding site) or indirectly by activation of G-protein coupled receptors (GPCRs) known to potentiate NMDA receptor function (i.e., mGluR5). This review will discuss the NMDA receptor hypofunction hypothesis, the NMDA receptor as an emerging target for the development of novel antipsychotic agents and progress towards in vivo target validation with GlyT1 inhibitors and mGluR5 positive allosteric modulators. Other potential targets for modulating NMDA receptor currents (polyamine sites, muscarinic receptors, etc...) will also be addressed briefly.