Long-term drug treatment of schizophrenia with conventional antipsychotics has limitations: an estimated quarter to one third of patients are treatment-resistant; conventional antipsychotics have only a modest impact upon negative symptoms (poverty of thought, social withdrawal and loss of affect); and adverse effects, particularly extrapyramidal symptoms (EPS). Newer, so-called atypical, antipsychotics such as olanzapine, risperidone, sertindole and clozapine (an old drug which was re-introduced in 1990) are claimed to address these limitations. Atypical agents are, at a minimum, at least as effective as conventional drugs such as haloperidol. They also cause substantially fewer extrapyramidal symptoms. However, some other adverse effects are more common than with conventional drugs. For example, clozapine carries a significant risk of serious blood disorders, for which special monitoring is mandatory; it also causes troublesome drowsiness and increased salivation more often than conventional agents. Some atypical agents cause more weight gain or QT prolongation than older agents. The choice of therapy is, therefore, not straightforward. At present, atypical agents represent an advance for patients with severe or intolerable EPS. Most published evidence exists to support the use of clozapine, which has also been shown to be effective in schizophrenia refractory to conventional agents. However, the need for compliance with blood count monitoring and its sedative properties make careful patient selection important. The extent of any additional direct benefit offered by atypical agents on negative symptoms is not yet clear. The lack of a depot formulation for atypical drugs may pose a significant practical problem. To date, only two double-blind studies in which atypical agents were compared directly have been published. Neither provides compelling evidence for the choice of one agent over another. Atypical agents are many times more expensive than conventional drugs. Although drug treatment constitutes only a small proportion of the costs of managing schizophrenia, the additional annual cost of the use of atypical agents in, say, a quarter of the likely U.K. schizophrenic population would be about 56 M pound sterling. There is only limited evidence of cost-effectiveness. Atypical antipsychotics are not currently licensed for other conditions where conventional antipsychotics are commonly used, such as behaviour disturbance or dementia in the elderly. Their dose, and place in treatment in such cases have yet to be determined.