Wider use of clozapine, one of the most effective antipshychotic drugs, is precluded by its propensity to cause agranulocytosis. Currently, clozapine is used for treatment-resistant schizophrenia, with mandatory blood count monitoring for the duration of treatment. Agranulocytosis occurs in up to 0.8% of patients and presents a significant medical challenge, despite decreasing mortality rates. In this paper, we review the epidemiology of clozapine-induced agranulocytosis (CLIA), advances in identifying genetic risk factors, and the preventive measures to reduce the risk of CLIA. We discuss the pathogenesis of CLIA, which, despite receiving considerable scientific attention, has not been fully elucidated. Finally, we address the clinical management and suggest the approach to clozapine re-challenge in patients with a previous episode of neutropenia. With a significant proportion of clozapine recipients in Western hemisphere being Black, we comment on the importance of recognizing benign ethnic neutropenia as a potential impediment to clozapine administration. This review aims to aid haematologists and psychiatrists to jointly manage neutropenia and agranulocytosis caused by clozapine.