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Schizophrenia is a chronic mental illness that affects up to 1% of the population. While efficacious therapies are available for positive symptoms, effective treatment of cognitive and negative symptoms remains an unmet need after decades of research. New developments in the field of neuroimaging are accelerating our knowledge gain regarding the underlying pathophysiology of symptoms in schizophrenia and psychosis spectrum disorders, inspiring new targets for drug development. However, no validated and qualified biomarkers are currently available to support the development of new therapeutics. This review summarizes the current use of neuroimaging technology in clinical drug development for psychotic disorders. As exemplified by drug development programs that target NMDA receptor hypofunction, neuroimaging results play a critical role in target discovery and establishing target engagement and dose selection. Furthermore, pharmacological neuroimaging may provide response biomarkers that allow for early decision making in proof-of-concept studies that leverage pharmacological challenge models in healthy volunteers. That said, while response and predictive biomarkers are starting to be evaluated in patient populations, they continue to play a limited role. Novel approaches to neuroimaging data acquisition and analysis may aid the establishment of biomarkers that are predictive at the individual level in the future. Nevertheless, various gaps in knowledge need to be addressed and biomarkers need to be validated to establish them as "fit for purpose" in drug development., (Copyright © 2024 Society of Biological Psychiatry. Published by Elsevier Inc. All rights reserved.)