Schizophrenia and bipolar disorder remain two of the most severe and difficult to treat psychotic disorders hampered by our poor understanding of their pathologies. The development of typical antipsychotic drugs opened an avenue of investigation through the dopamine D2 receptor in schizophrenia. With the reintroduction of the atypical antipsychotic clozapine came the development of a new generation of atypical agents and hypotheses challenging the centrality of this receptor in explaining antipsychotic effects. Evaluation of these competing theories does not provide sufficient evidence to displace the importance of the dopamine D2 receptor in antipsychotic efficacy, but does raise limitations of it as an explanatory hypothesis. Further, the treatment of other symptom domains in schizophrenia remains relatively neglected and open for the development of novel therapies. Similar to schizophrenia, bipolar disorder presents a diversity of clinical states but unlike schizophrenia, its mainstay of treatment, lithium, has not had a clear receptor target impeding understanding of the disorder's pathology and treatment. This has pushed investigation into other domains emphasising a number of intracellular signalling pathways and glial-neuronal interactions. The heavy genetic loading of bipolar disorder has allowed linkage analyses to identify a number of putative regions, however, the diversity of phenotypes complicates such studies. Polymorphisms of candidate genes have yielded potential leads such as dopamine beta hydroxylase in mood disorder and the serotonin transporter for treatment response. It is anticipated that combining the above approaches may hold promise for the development of more effective treatments.