In this review we consider the application of mutant mouse phenotypes to the study of psychotic illness in general and schizophrenia in particular, as they relate to behavioral, psychopharmacological, and cellular phenotypes of putative import for antipsychotic drug development. Mutant models appear to be heuristic at two main levels; firstly, by indicating the functional roles of neuronal components thought to be of relevance to the putative pathobiology of psychotic illness, they help resolve overt behavioral and underlying cellular processes regulated by those neuronal components; secondly, by indicating the functional roles of genes associated with risk for psychotic illness, they help resolve overt behavioral and underlying cellular processes regulated by those risk genes. We focus initially on models of dopaminergic and glutamatergic dysfunction. Then, we consider advances in the genetics of schizophrenia and mutant models relating to replicable risk genes. Lastly, we extend this discussion by exemplifying two new variant approaches in mutant mice that may serve as prototypes for advancing antipsychotic drug development. There is continuing need not only to address numerous technical challenges but also to develop more "real-world" paradigms that reflect the milieu of gene × environment and gene × gene interactions that characterize psychotic illness and its response to antipsychotic drugs.