Schizophrenia is a highly debilitating mental disorder that affects ∼1% of the general population, yet it continues to be poorly understood. Recent studies have identified variations in several genes that are associated with this disorder in diverse populations, including those that encode neuregulin 1 (NRG1) and its receptor ErbB4. The past few years have witnessed exciting progress in our knowledge of NRG1 and ErbB4 functions and the biological basis of the increased risk for schizophrenia that is potentially conferred by polymorphisms in the two genes. An improved understanding of the mechanisms by which altered function of NRG1 and ErbB4 contributes to schizophrenia might eventually lead to the development of more effective therapeutics.