Polymorphic drug-metabolizing enzymes (DMEs) are responsible for the metabolism of the majority of psychotropic drugs. By explaining a large portion of variability in individual drug metabolism, pharmacogenetics offers a diagnostic tool in the burgeoning era of personalized medicine. This review updates existing evidence on the influence of pharmacogenetic variants on drug exposure and discusses the rationale for genetic testing in the clinical context. Dose adjustments based on pharmacogenetic knowledge are the first step to translate pharmacogenetics into clinical practice. However, also clinical factors, such as the consequences on toxicity and therapeutic failure, must be considered to provide clinical recommendations and assess the cost-effectiveness of pharmacogenetic treatment strategies. DME polymorphisms are relevant not only for clinical pharmacology and practice but also for research in psychiatry and neuroscience. Several DMEs, above all the cytochrome P (CYP) enzymes, are expressed in the brain, where they may contribute to the local biochemical homeostasis. Of particular interest is the possibility of DMEs playing a physiological role through their action on endogenous substrates, which may underlie the reported associations between genetic polymorphisms and cognitive function, personality and vulnerability to mental disorders. Neuroimaging studies have recently presented evidence of an effect of the CYP2D6 polymorphism on basic brain function. This review summarizes evidence on the effect of DME polymorphisms on brain function that adds to the well-known effects of DME polymorphisms on pharmacokinetics in explaining the range of phenotypes that are relevant to psychiatric practice.