Animal models of psychiatric disorders have been highly effective in advancing the field, identifying circuits related to pathophysiology, and identifying novel therapeutic targets. In this review, we show how animal models, particularly those based on development, have provided essential information regarding circuits involved in disorders, disease progression, and novel targets for intervention and potentially prevention. Nonetheless, in recent years there has been a pushback, largely driven by the US National Institute of Mental Health (NIMH), to shift away from animal models and instead focus on circuits in normal subjects. This has been driven primarily from a lack of discovery of new effective therapeutic targets, and the failure of targets based on preclinical research to show efficacy. We discuss why animal models of complex disorders, when strongly cross-validated by clinical research, are essential to understand disease etiology as well as pathophysiology, and direct new drug discovery. Issues related to shortcomings in clinical trial design that confound translation from animal models as well as the failure to take patient pharmacological history into account are proposed to be a source of the failure of what are likely effective compounds from showing promise in clinical trials.