Neuropsychiatric illnesses are associated with dysfunction in distributed prefrontal neural systems that underlie perception, cognition, social interactions, emotion regulation, and motivation. The high degree of learning-dependent plasticity in these networks-combined with the availability of advanced computerized technology-suggests that we should be able to engineer very specific training programs that drive meaningful and enduring improvements in impaired neural systems relevant to neuropsychiatric illness. However, cognitive training approaches for mental and addictive disorders must take into account possible inherent limitations in the underlying brain 'learning machinery' due to pathophysiology, must grapple with the presence of complex overlearned maladaptive patterns of neural functioning, and must find a way to ally with developmental and psychosocial factors that influence response to illness and to treatment. In this review, we briefly examine the current state of knowledge from studies of cognitive remediation in psychiatry and we highlight open questions. We then present a systems neuroscience rationale for successful cognitive training for neuropsychiatric illnesses, one that emphasizes the distributed nature of neural assemblies that support cognitive and affective processing, as well as their plasticity. It is based on the notion that, during successful learning, the brain represents the relevant perceptual and cognitive/affective inputs and action outputs with disproportionately larger and more coordinated populations of neurons that are distributed (and that are interacting) across multiple levels of processing and throughout multiple brain regions. This approach allows us to address limitations found in earlier research and to introduce important principles for the design and evaluation of the next generation of cognitive training for impaired neural systems. We summarize work to date using such neuroscience-informed methods and indicate some of the exciting future directions of this field.