Psychopharmacological challenge studies have made significant contributions to understanding the neurobiological basis of psychiatric disorders. With the emergence of novel, sometimes alternative, techniques to study the neurobiology of psychiatric disorders, and the risks associated with some psychopharmacological challenge studies, the role of this technique has come under increasing scrutiny. Using the psychostimulant paradigm in schizophrenia research as the prototypical study, the important scientific contributions and risks of psychopharmacological challenge studies will be reviewed. The historical contributions of psychopharmacological challenge studies to psychiatric research will be reviewed. The risks and benefits of this approach will then be reviewed, in particular within the current ethical standards. Finally, the future role of psychopharmacological challenge studies is discussed. In the foreseeable future, psychopharmacological challenge studies either alone or in conjunction with novel techniques such as brain imaging, may continue to provide an important method to test candidate pathophysiologic mechanisms and to study potential pharmacotherapies.