The dopaminergic system plays an important role in the etiology of schizophrenia, and most antipsychotic drugs exert their functions by blocking dopamine D(2) receptors (D(2)Rs). Since the signaling strength mediated by D(2)Rs is regulated by internalization and degradation processes, it is crucial to identify molecules that modulate D(2)R localization at the cell surface. Here, we show that the neural cell adhesion molecule (NCAM) promotes D(2)R internalization/desensitization and subsequent degradation via direct interaction with a short peptide in the third intracellular loop of the D(2)R. NCAM deficiency in mice leads to increased numbers of D(2)Rs at the cell surface and augmented D(2)R signaling as a result of impaired D(2)R internalization. Furthermore, NCAM-deficient mice show higher sensitivity to the psychostimulant apomorphine and exaggerated activity of dopamine-related locomotor behavior. These results demonstrate that, in addition to its classical function in cell adhesion, NCAM is involved in regulating the trafficking of the neurotransmitter receptor D(2)R as well as receptor-mediated signaling and behavior, thus implicating NCAM as modulator of the dopaminergic system and a potential pharmacological target for dopamine-related neurological and psychiatric disorders.