Multicentre trials in patients with schizophrenia confirm that olanzapine is a novel antipsychotic agent with broad efficacy, eliciting a response in both the positive and negative symptoms of schizophrenia. Compared with traditional antipsychotic agents, olanzapine causes a lower incidence of extrapyramidal symptoms and minimal perturbation of prolactin levels. Generally, olanzapine is well tolerated. The pharmacokinetics of olanzapine are linear and dose-proportional within the approved dosage range. Its mean half-life in healthy individuals was 33 hours, ranging from 21 to 54 hours. The mean apparent plasma clearance was 26 L/h, ranging from 12 to 47 L/h. Smokers and men have a higher clearance of olanzapine than women and nonsmokers. After administering [14C]olanzapine, approximately 60% of the radioactivity was excreted in urine and 30% in faeces. Olanzapine is predominantly bound to albumin (90%) and alpha 1-acid glycoprotein (77%). Olanzapine is metabolised to its 10- and 4'-N-glucuronides, 4'-N-desmethylolanzapine [cytochrome P450 (CYP) 1A2] and olanzapine N-oxide (flavin mono-oxygenase 3). Metabolism to 2-hydroxymethylolanzapine via CYP2D6 is a minor pathway. The 10-N-glucuronide is the most abundant metabolite, but formation of 4'-N-desmethylolanzapine is correlated with the clearance of olanzapine. Olanzapine does not inhibit CYP isozymes. No clinically significant metabolic interactions were found between olanzapine and diazepam, alcohol (ethanol), imipramine, R/S-warfarin, aminophylline, biperiden, lithium or fluoxetine. Fluvoxamine, an inhibitor of CYP1A2, increases plasma concentrations of olanzapine; inducers of CYP1A2, including tobacco smoke and carbamazepine, decrease olanzapine concentrations. Orthostatic changes were observed when olanzapine and diazepam or alcohol were coadministered. Pharmacodynamic interactions occurred between olanzapine and alcohol, and olanzapine and imipramine, implying that patients should avoid operating hazardous equipment or driving an automobile while experiencing the short term effects of the combinations. Individual factors with the largest impact on olanzapine pharmacokinetics are gender and smoking status. The plasma clearance of olanzapine generally varies over a 4-fold range, but the variability in the clearance and concentration of olanzapine does not appear to be associated with the severity or duration of adverse effects or the degree of efficacy. Thus, dosage adjustments appear unnecessary for these individual factors. However, dosage modification should be considered for patients characterised by a combination of factors associated with decreased oxidative metabolism, for example, debilitated or elderly women who are nonsmokers.