In contrast to most fields of medicine, progress to discover and develop new and improved psychiatric drugs has been slow and disappointing. The vast majority of currently prescribed drugs to treat schizophrenia, mood and anxiety disorders are arguably no more effective than the first generation of psychiatric drugs introduced well over 50 years ago. With only a few exceptions current psychiatric drugs work via the same fundamental mechanisms of action as first-generation agents. Here we describe the reasons for this slow progress and outline a number of areas of research that involve a greater reliance on experimental therapeutics utilizing recent advances in neuroscience to better understand disease biology. We exemplify the potential impact of these areas of research focus with several recent examples of novel agents that have emerged and which support our optimism that newer, more effective and better tolerated agents, are on the horizon. Together with existing drugs these newer agents and novel mechanisms could offer markedly improved functional outcomes for the millions of people still disabled by psychiatric disorders.