Addiction is a complex neuropsychiatric disorder which causes disruption at multiple levels, including cognitive, emotional, and behavioral domains. Traditional biological theories of addiction have focused on the mesolimbic dopamine pathway and the nucleus accumbens as anatomical substrates mediating addictive-like behaviors. More recently, we have begun to recognize the engagement and dynamic influence of a much broader circuitry which encompasses the frontal cortex, the amygdala, and the hippocampus. In particular, neurogenesis in the adult hippocampus has become a major focus of attention due to its ability to influence memory, motivation, and affect, all of which are disrupted in addiction. First, I summarize toxicological data that reveal strongly suppressive effects of drug exposure on adult hippocampal neurogenesis. Then, I discuss the impact of deficient neurogenesis on learning and memory function, stress responsiveness and affective behavior, as they relate to addiction. Finally, I examine recent behavioral observations that implicate neurogenesis in the adult hippocampus in the emergence and maintenance of addictive behavior. The evidence reviewed here suggests that deficient neurogenesis is associated with several components of the downward spiraling loop that characterizes addiction, including elevated sensitivity to drug-induced reward and reinforcement, enhanced neurohormonal responsiveness, emergence of a negative affective state, memory impairment, and inflexible behavior.