During the past 5 years unprecedented advances have taken place in the psychopharmacology of schizophrenia and related psychoses. Clozapine and risperidone, two prototypic novel antipsychotic drugs, have had a significant impact on the treatment of psychotic disorders. Additionally, they have ushered in another generation of antipsychotic drugs with complex pharmacologic profiles, potentially enhanced efficacy, and more benign side-effect profiles than previously associated with conventional antipsychotic medications. This review highlights these developments, implications for the management of psychotic disorders, and the use of novel antipsychotic drugs in specific clinical subgroups.