Arginine vasopressin (AVP) is a cyclic nonapeptide synthesized exclusively by neurosecretory cells of the central nervous system (CNS). Two functionally distinct vasopressinergic systems can be defined based on differences in the sites of action and release of AVP. The peripheral vasopressinergic system encompasses the sites of action for AVP released into peripheral circulation (e.g. vascular smooth muscle, liver, kidney) from nerve terminals in the posterior pituitary. Peripherally circulating AVP is responsible for the classic endocrine functions ascribed to this neurohormone (e.g. vasoconstriction, glycogen metabolism, antidiuresis). The central vasopressinergic system, on the other hand, includes the sites of AVP synthesis and release within the CNS, where AVP acts as a neuromodulator / neurotransmitter regulating an array of CNS-mediated functions (e.g. learning and memory, neuroendocrine reactivity, social behaviors, circadian rhythmicity, thermoregulation, and autonomic function). Historically, pharmaceutical interest has focused on drug development efforts that sought to exploit the peripheral effects of AVP. Evidence, however, from clinical studies and animal models of CNS disorders has directly implicated disturbances in vasopressinergic activity in the pathophysiology of a number of human psychiatric disorders (mood, anxiety, and cognitive disorders). This review will examine the available evidence of central vasopressinergic system involvement in psychiatric disorders, and the potential opportunities for development of novel psychopharmaceuticals around this system will be discussed. Specific lines of evidence will be presented which rationalize each AVP receptor subtype (V1R or V1a, V2R, V3R or V1b) as a molecular target for particular psychiatric indications.