Studies of psychiatric disorders have traditionally focused on emotional symptoms such as depression, anxiety and hallucinations. However, poorly controlled cognitive deficits are equally prominent and severely compromise quality of life, including social and professional integration. Consequently, intensive efforts are being made to characterize the cellular and cerebral circuits underpinning cognitive function, define the nature and causes of cognitive impairment in psychiatric disorders and identify more effective treatments. Successful development will depend on rigorous validation in animal models as well as in patients, including measures of real-world cognitive functioning. This article critically discusses these issues, highlighting the challenges and opportunities for improving cognition in individuals suffering from psychiatric disorders.