This paper reviews recent developments in the neurocircuitry and neurobiology of addiction from a perspective of allostasis. A model is proposed for brain changes that occur during the development of addiction that explain the persistent vulnerability to relapse long after drug-taking has ceased. Addiction is presented as a cycle of spiralling dysregulation of brain reward systems that progressively increases, resulting in the compulsive use and loss of control over drug-taking. The development of addiction recruits different sources of reinforcement, different neuroadaptive mechanisms, and different neurochemical changes to dysregulate the brain reward system. Counteradaptive processes such as opponent-process that are part of normal homeostatic limitation of reward function fail to return within the normal homeostatic range and are hypothesized to form an allostatic state. Allostasis from the addiction perspective is defined as the process of maintaining apparent reward function stability by changes in brain reward mechanisms. The allostatic state represents a chronic deviation of reward set point and is fueled not only by dysregulation of reward circuits per se, but also by the activation of brain and hormonal stress responses. The manifestation of this allostatic state as compulsive drug-taking and loss of control over drug-taking is hypothesized to be expressed through activation of brain circuits involved in compulsive behavior such as the cortico-striatal-thalamic loop. The view that addiction is the pathology that results from an allostatic mechanism using the circuits established for natural rewards provides a realistic approach to identifying the neurobiological factors that produce vulnerability to addiction and relapse.