A decade ago, we hypothesized that drug addiction can be viewed as a transition from voluntary, recreational drug use to compulsive drug-seeking habits, neurally underpinned by a transition from prefrontal cortical to striatal control over drug seeking and taking as well as a progression from the ventral to the dorsal striatum. Here, in the light of burgeoning, supportive evidence, we reconsider and elaborate this hypothesis, in particular the refinements in our understanding of ventral and dorsal striatal mechanisms underlying goal-directed and habitual drug seeking, the influence of drug-associated Pavlovian-conditioned stimuli on drug seeking and relapse, and evidence for impairments in top-down prefrontal cortical inhibitory control over this behavior. We further review animal and human studies that have begun to define etiological factors and individual differences in the propensity to become addicted to drugs, leading to the description of addiction endophenotypes, especially for cocaine addiction. We consider the prospect of novel treatments for addiction that promote abstinence from and relapse to drug use.