We hypothesize that drug addiction can be viewed as the endpoint of a series of transitions from initial voluntary drug use through the loss of control over this behaviour, such that it becomes habitual and ultimately compulsive. We describe evidence that the switch from controlled to compulsive drug seeking represents a transition at the neural level from prefrontal cortical to striatal control over drug-seeking and drug-taking behaviours as well as a progression from ventral to more dorsal domains of the striatum, mediated by its serially interconnecting dopaminergic circuitry. These neural transitions depend upon the neuroplasticity induced by chronic self-administration of drugs in both cortical and striatal structures, including long-lasting changes that are the consequence of toxic drug effects. We further summarize evidence showing that impulsivity, a spontaneously occurring behavioural tendency in outbred rats that is associated with low dopamine D2/3 receptors in the nucleus accumbens, predicts both the propensity to escalate cocaine intake and the switch to compulsive drug seeking and addiction.