The changes in dopamine system regulation occurring during stimulant administration are examined in relation to a new model of dopamine system function. This model is based on the presence of a tonic low level of extracellular dopamine that is released by the presynaptic action of corticostriatal afferents. In contrast, spike-dependent dopamine release results in a phasic, high concentration of dopamine in the synaptic cleft that is rapidly inactivated by reuptake. Tonic dopamine has the ability to down-modulate spike-dependent phasic dopamine release via stimulation of the very sensitive dopamine autoreceptors present on dopamine terminals. Stimulants are known to elicit locomotion and stimulate reward sites by releasing dopamine from terminals in the nucleus accumbens, which is followed by a rebound depression. It is proposed that the initial activating action of stimulants is caused by increasing the release of dopamine into the synaptic cleft to activate the phasic dopamine response. However, by interfering with dopamine uptake, stimulants also allow dopamine to escape the synaptic cleft, thereby depressing subsequent spike-dependent phasic dopamine release by increasing the tonic stimulation of the autoreceptor. In contrast, repeated stimulant administration is proposed to cause long-term sensitization by pharmacological disruption of a cascade of homeostatic compensatory processes. Upon drug withdrawal, the fast compensatory systems that were blocked by stimulants rapidly restore homeostasis to the system at a new steady-state level of interaction. As a consequence, the slowly changing but potentially more destabilizing compensatory responses are prevented from returning to their baseline conditions. This results in a permanent change in the responsivity of the system. Homeostatic systems are geared to compensate for unidimensional alterations in a system, and are capable of restoring function even after massive brain lesions or the continuous presence of stimulant drugs. However, the system did not evolve to deal effectively with repetitive introduction and withdrawal of drugs that disrupt dopamine system regulation. As a consequence, repeated insults to a biological system by application and withdrawal of drugs that interfere with its homeostatic regulation may be capable of inducing non-reversible changes in its response to exogenous and endogenous stimuli.