This review summarizes recent studies with 5-hydroxytryptamine(2A) (5-HT2A) receptors, which represent the major site of action of hallucinogens and a likely site for atypical antipsychotic drug actions. We present evidence demonstrating that atypical antipsychotic drugs, as a group, have a preferentially high affinity for 5-HT2A receptors, compared with their affinities for other neurotransmitter receptors, The 5-HT2A receptor blockade seen with atypical antipsychotic drugs is probably an essential factor in explaining many of the unique features of atypical antipsychotic drugs. Atypical antipsychotic drugs have high affinities for several other 5-HT receptors (5-HT2C, 5-HT6, and 5-HT7), and the potential role of these novel 5-HT receptors in atypical antipsychotic drug action is also summarized. Hallucinogens are the second major class of drugs that exert their actions by binding to 5-HT2A receptors, Studies are summarized that provide novel insights into the mechanism of action of hallucinogens at the molecular and atomic level. Two models of hallucinogen action, one atomic, the other thermodynamic, are advanced to explain various aspects of hallucinogen actions at 5-HT2A receptors, Finally, a summary of studies demonstrating that 5-HT2A receptors are regulated in a paradoxical manner is presented. Particular attention is paid to recent findings suggesting that both agonists and antagonists may induce receptor internalization. We propose that receptor redistribution may underlie many of the therapeutic actions of atypical antipsychotic drugs in vivo.