The function and dysfunction of the central noradrenergic system were reviewed together with the implications for the pathophysiological understanding of functional psychosis. Like the peripheral noradrenergic system, the central noradrenergic system plays a pivotal role in fight/flight reactions and stress. Overactivity of the system induces not only a sympathotonic state but also hyperarousal accompanied by insomnia, anxiety, irritability, emotional instability, paranoia, and excitation. On the other hand, its underactivity lowers the sympathetic tone and arousal level, resulting in hypersomnia, blunted responsiveness, or apathy. It has been confirmed in animal experiments that excess stress causes dysfunctions of the central noradrenergic system as a result of compensation, such as the overutilization-induced oversynthesis of noradrenaline. Dysfunction of the system, particularly its overactivity, plays an important role in various functional psychoses such as anxiety disorder, schizophrenia, and mood disorder, as well as behavioral and psychological symptoms of dementia (BPSD). Pharmacologically, the sedative effect of minor and major tranquilizers on hyperarousal is mediated by their action as noradrenaline antagonists. Some antidepressants potentiate noradrenergic activity, and should be used carefully in hyperaroused depressive patients. Thus, clinical evaluation of the central noradrenergic pathophysiology will provide us with information related to arousal to advance our understanding and treatment of functional psychoses.