It is widely known that new neurons are continuously generated in the dentate gyrus of the hippocampus in the adult mammalian brain. This neurogenesis has been implicated in depression and antidepressant treatments. Recent evidence also suggests that the dentate gyrus is involved in the neuropathology and pathophysiology of schizophrenia and other related psychiatric disorders. Especially, abnormal neuronal development in the dentate gyrus may be a plausible risk factor for the diseases. The synapse made by the mossy fiber, the output fiber of the dentate gyrus, plays a critical role in regulating neuronal activity in its target CA3 area. The mossy fiber synapse is characterized by remarkable activity-dependent short-term synaptic plasticity that is established during the postnatal development and is supposed to be central to the functional role of the mossy fiber. Any defects, including developmental abnormalities, in the dentate gyrus and drugs acting on the dentate gyrus can modulate the mossy fiber-CA3 synaptic transmission, which may eventually affect hippocampal functions. In this paper, I review recent evidence for involvement of the dentate gyrus and mossy fiber synapse in psychiatric disorders and discuss potential importance of drugs targeting the mossy fiber synapse either directly or indirectly in the therapeutic treatments of psychiatric disorders.