The initial scientification of psychiatry after the European discovery of psychotropic drugs via psychopharmacology and biological psychiatry has gradually ended in an impasse. As a result of at least four developments, psychiatry is re-orientating in a more dimensional and functional direction in order to adapt to the progress in the neurosciences. Rigid adherence to nosological systems should be replaced by a careful observation and description of psychopathology as well as a search for relevant psychological dysfunctions and their putative pathophysiological basis. Psychotropics have to be developed that do not suppress symptoms but promote potentially intact functions. Emphasis should be given to the brain mechanisms that are involved in habit formation and chronicity. Modern genetics will drive the discipline towards early intervention and prevention and will elucidate the relations between genetic disorders and the behavioural phenotype. The basis, however, remains clinical observation, dynamically reshaped by neuroscience.