Tetrahydroprotoberberines (THPBs) represent a series of compounds extracted from the Chinese herb Corydalis ambigua and various species of Stephania. THPBs, dependent on the presence of hydroxyl groups in its structure, are divided into three types: nonhydroxyl-THPBs, monohydroxyl-THPBs and dihydroxyl-THPBs. THPBs are identified as a new category of dopamine receptor ligands. Among all THPBs, dihydroxyl-THPBs attracted particular attention because of their dual actions on dopamine (DA) receptors. They exhibit D(1) receptor agonistic activity while acting as D(2) receptor antagonists. This unique pharmacological profile made dihydroxyl-THPBs such as l-stepholidine (l-SPD) potential agents in the treatment of drug addiction, Parkinson's disease, and especially, schizophrenia. Clinical studies have shown that co-administration of l-SPD with a typical antipsychotic drug significantly enhances the therapeutic effects and remarkably reduces the tardive dyskinesia induced by the typical antipsychotic drug used with schizophrenic patients. Moreover, l-SPD alone was shown to have therapeutic value without inducing significant extrapyramidal side effects and also seemed to reduce the negative symptoms of schizophrenia. This is confirmed in experimental studies using animal models of schizophrenia, in which l-SPD improved social interaction and cognitive function, inhibited hyperactivity in schizophrenic animals. This review discusses the chemistry, pharmacology and clinical implications of l-THPBs in the drug development for psychosis and neurobiological diseases.