Recent attention has been focused on the involvement of serotonin (5-HT) in the pathophysiology of schizophrenia and its role in mediating antipsychotic drug effects. There are two reasons for the new emphasis: the tremendous success of the so-called "atypical" antipsychotic drugs (a common feature of which is their high affinity for specific 5-HT receptor subtypes); and the elucidation of a complex family of 5-HT receptors whose function and pharmacology is only beginning to be understood. This paper will review the evidence that pertains to the role of 5-HT in mediating antipsychotic drug effects. The interaction of dopamine and 5-HT systems will be reviewed, and the mechanisms of action of atypical antipsychotic drugs will be evaluated in this context. The impact of serotonin on neurodevelopment, and the involvement of serotonin in the psychotomimetic and psychotogenic properties of hallucinogens, will be discussed. Together, these facts will be placed into the context of changes in serotonergic function in schizophrenia.