There is strong evidence to suggest that genetic variation plays an important role in inter-individual differences in medication response and toxicity. The rapidly evolving disciplines of pharmacogenetics and pharmacogenomics seek to uncover this genetic variation in order to predict treatment outcomes. The goal is to be able to select the drugs with the greatest likelihood of benefit and the least likelihood of harm in individual patients, based on their genetic make-up-individualized therapy. Pharmacogenomic studies utilize genomic technologies to identify chromosomal areas of interest and novel putative drug targets, while pharmacogenetic strategies rely on studying sequence variations in candidate genes suspected of affecting drug response or toxicity. The candidate gene variants that affect function of the gene or its protein product have the highest priority for investigation. This review will provide demonstrative examples of functional candidate gene variants studied in a variety of antipsychotic response phenotypes in the treatment of schizophrenia. Serotonin and dopamine receptor gene variants in clozapine response will be examined, and in the process the need for sub-phenotypes will be pointed out. Our recent pharmacogenetic studies of the subphenotype of neurocognitive functioning following clozapine treatment and the dopamine D(1) receptor gene (DRD1) will be presented, highlighting our novel neuroimaging data via [(18)F]fluoro-2-deoxy-D-glucose (FDG) metabolism position emission tomography (PET) that demonstrates hypofunctioning of several brain regions in patients with specific dopamine D(1) genotype. Preliminary candidate gene studies investigating the side-effect of clozapine-induced weight gain are also presented. The antipsychotic adverse reaction of tardive dyskinesia and its association with the dopamine D(3) receptor will be critically examined, as well as the added influence of antipsychotic metabolism via the cytochrome P450 1A2 gene (CYP1A2 ). Results that delineate the putative gene-gene interaction between DRD3 and CYP1A2 are also presented. We have also utilized FDG-PET subphenotyping to demonstrate increased brain region activity in patients who have the dopamine D(3) genotype that confers increased risk for antipsychotic induced tardive dyskinesia. The merits and weaknesses of neuroimaging technologies as applied to pharmacogenetic analyses are discussed. To the extent that the above data become more widely verified and replicated, the field of psychiatry will move closer to clinically meaningful tests that will be useful in deciding the best drug for each individual patient.