Since the discovery that the therapeutic efficacy of antipsychotic drugs was significantly correlated to their ability to block dopamine D2 receptors, abnormal dopamine transmission in the forebrain has been postulated to underlie psychosis in schizophrenia. In the past 15 years, an impressive amount of clinical and basic research aimed at the study of schizophrenia has indicated that prefrontal and temporal cortical abnormalities may be more important in the etiology of many of the symptoms of schizophrenia, including psychosis. However, the cortical systems that appear to have structural and/or metabolic abnormalities in schizophrenia patients potently regulate forebrain dopamine transmission through a number of mechanisms. In turn, dopamine modulates excitatory transmission mediated by frontal and temporal cortical projections to the basal ganglia and other regions. The present review summarizes the multiple interactions between forebrain DA systems and frontal and temporal corticostriatal transmission. It then examines the role of these interactions in normal behaviors and the psychopathology of schizophrenia.