Atypical antipsychotic drugs related to clozapine, improve psychosis, cognition and negative symptoms, while producing minimal extrapyramidal side effects, in patients with schizophrenia. This appears to be mediated mainly through the combined effect of relatively more potent blockade of 5-HT2A receptors, located on cortical and hippocampal glutamatergic and GABAergic neurons, as well as cell bodies of the mesolimbic and mesocortical dopamine (DA) neurons, and weaker blockade of D2 receptors in the ventral and dorsal striatum and pyramidal neurons in cortical areas, as well as the cell bodies of DA neurons. This combination of effects is important to their ability to enhance cortical and hippocampal DA efflux, which, while producing less increase of DA efflux in the striatum. Selective inverse agonists of 5-HT2A receptors alone, or in combination with subthreshold doses of atypical antipsychotic drugs have shown effects similar to those of atypicals in both animal models and clinical trials in patients with schizophrenia. Atypical antipsychotic drugs and 5-HT2A receptor antagonists/inverse agonists have been found to prevent or reverse acute and chronic effects of the N-methyl-d-aspartate non-competitive antagonist, phencyclidine (PCP), including cognitive impairment, in part through enhancing the turnover of DA in cortex. PET, postmortem and genetic studies, as well as clinical studies with 5-HT2A hallucinogens, strongly support the importance of 5-HT2A receptor blockade in the action of atypical antipsychotic drugs. Their 5-HT1A receptor partial agonism, produced directly or indirectly, also contributes to enhancement of efflux of DA in cortical regions. Other serotonergic actions, e.g. 5-HT2C, 5-HT6 and possibly 5-HT7 antagonism, may also contribute to their efficacy or, in the case of 5-HT2C antagonism, side effects such as weight gain.