The possibility that the neuropeptide neurotensin (NT) may function as an endogenous antipsychotic compound was first hypothesized almost two decades ago. Since that time, considerable effort has been directed towards determining whether NT neurons mediate the effects of antipsychotic drugs (APDs). The anatomic, biochemical, behavioral, and clinical relevance of this hypothesis is reviewed. Although the majority of the available evidence is indirect, the availability of several NT receptor (NTR) antagonists have now made possible the direct examination of the involvement of the NT system in the mechanism of action of APDs. Preliminary studies in our laboratory demonstrate the ability of a selective NTR antagonist to block the effects of APDs in two models of sensory motor gating deficits characteristic of schizophrenia. These data, taken together with a compelling series of studies demonstrating that increases of NT/neuromedin N mRNA expression and NT content in the nucleus accumbens and striatum after chronic administration of APDs are predictive of clinical efficacy and extrapyramidal side effects, respectively, provide direct preclinical evidence for a role of the NT system in the clinical efficacy of APDs. Although effects of selective NTR antagonists in normal volunteers or schizophrenic patients have not been studied, and nonpeptidergic NTR agonists have not yet been identified, these cumulative results provide the groundwork for the use of NT-ergic compounds in the treatment of schizophrenia.