Behavioral sensitization is a progressive, enduring enhancement of behaviors that develops following repeated stimulant administration. It is mediated in part by dopaminergic pathways that also modulate a number of psychiatric conditions including the development of psychosis. We propose that down-regulation of D3 dopamine receptor function in critical brain regions contributes to sensitization. Rodent locomotion, a sensitizable behavior, is regulated by the opposing influence of dopamine receptor subtypes, with D3 stimulation opposing concurrent D1 and D2 receptor activation. The D3 dopamine receptor has a 70-fold greater affinity for dopamine than D1 or D2 dopamine receptors. This imbalance in ligand affinity dictates greater occupancy for D3 than D1 or D2 receptors at typical dopamine concentrations following stimulant drug administration, resulting in differences in the relative tolerance at D3 vs D1 and D2 receptors. Sensitization may therefore result in part from accommodation of the inhibitory D3 receptor 'brake' on D1/D2 mediated behaviors, leading to a progressive locomotion increase following repeated stimulant exposure. The requirement for differential tolerance at D3 vs D1 and D2 receptors may explain the observed development of sensitization following application of cocaine, but not amphetamine, directly into nucleus accumbens. If correct, the 'D3 Dopamine Receptor Hypothesis' suggests D3 antagonists could prevent sensitization, and may interrupt the development of psychosis when administered during the prodromal phase of psychotic illness. Additional study is needed to clarify the role of the D3 dopamine receptor in sensitization and psychosis.