The mesolimbic hypothesis has been a central dogma of schizophrenia for decades, positing that aberrant functioning of midbrain dopamine projections to limbic regions causes psychotic symptoms. Recently, however, advances in neuroimaging techniques have led to the unanticipated finding that dopaminergic dysfunction in schizophrenia is greatest within nigrostriatal pathways, implicating the dorsal striatum in the pathophysiology and calling into question the mesolimbic theory. At the same time our knowledge of striatal anatomy and function has progressed, suggesting new mechanisms via which striatal dysfunction may contribute to the symptoms of schizophrenia. This Review draws together these developments, to explore what they mean for our understanding of the pathophysiology, clinical manifestations, and treatment of the disorder.