This review presents an overview of some of the pre-clinical and clinical issues that have contributed to the failures of potential novel neuropsychiatric drugs, which have prompted a re-examination of the role of animal models of neuropsychiatric disorders. Advances both in basic neuroscience and technology have driven the development of animal models of aspects of neuropsychiatric disorders. Genetics and environmental factors have been the primary contributors to the development of new animal models. Neuroimaging has contributed to the search for biomarkers by which neuropsychiatric disorders may be identified and differentiated, its progression monitored and that the effects of therapy assessed. Parallel to these theoretical and practical advancements have been the changes in the diagnosis and classification of neuropsychiatric disorders from DSM-4 to DSM-5, and emergence of the NIH initiatives such as MATRICS; CNTRICS and RDoC. These latter changes are shifting our concepts of neuropsychiatric disorders away from phenomenology to their biology and thus aligning physiology with psychology.