The major targets of current drugs used in mental health, such as neurotransmitter receptors and transporters, are based on serendipitous findings from several decades ago, and there is currently a severe drought of new drug targets. There is a pressing need for novel drugs, and much hope has been placed on the use of molecular genetics to help define them. However, despite evidence for a genetic basis to schizophrenia stretching back for over a century, and a heritability of about 80%, the identification of susceptibility genes has been an uphill struggle. Candidate gene studies, which have generally focussed on obvious candidates from the dopamine and serotonin systems, as well as genes involved in brain development, have not generally been successful, although meta-analysis indicates that the dopamine D3 receptor gene (DRD3) and the serotonin receptor gene type 2A (HTR2A) may have a very small influence on risk. Linkage analysis has provided robust evidence of genetic loci, for example, on chromosomes 8p, 13q and 22q, and also implies shared genetic aetiology with bipolar disorder. The identification of these loci together with advances in genetic technology, especially the characterisation of polymorphisms, the understanding of haplotypes and the development of statistical methods, has lead to the identification of several plausible susceptibility genes, including neuregulin 1, proline dehydrogenase and dysbindin. Interestingly, these genes point more towards a role for the glutamate pathway rather than the dopamine pathway in schizophrenia. We have attempted to replicate some of these findings in schizophrenic patients from SW China, and we find significant association with a novel neuregulin 1 haplotype, with proline dehydrogenase polymorphisms, but not with catechol-O-methyltransferase (COMT). The replication of neuregulin 1 association on chromosome 8p by several investigators is the most convincing to date, and the presence of a syndrome similar to dementia praecox of 8p linked families, and the lack of linkage of bipolar disorder to this region is a testament to the ideas of Kraepelin more than 100 years ago.