Iloperidone is a recently approved antipsychotic agent indicated for the acute treatment of schizophrenia in adults. Iloperidone is characterized as a serotonin 5-HT2A and dopamine D2 receptor antagonist, which makes its core mechanism of action similar to other second-generation antipsychotic agents. The affinity (or lack thereof) of iloperidone for other receptors (e.g., histamine, muscarinic, α1-adrenoceptors, serotonin) results in a unique side effect and perhaps response profile that may make it an additional option for patients who have previously not tolerated or adequately responded to other available agents. Iloperidone has been studied in over 3,200 patients throughout its development. Its efficacy appears to be similar to haloperidol, risperidone and ziprasidone. It appears to be safe with minimal extrapyramidal side effects, weight gain and prolactin elevation. A cautious dosing and titration schedule is recommended at the initiation of therapy due to the potential for orthostatic hypotension and dizziness. Drug interactions through the CYP3A4 and CYP2D6 enzymes, along with the potential for QT prolongation, may influence its use in certain patients. Genetic studies conducted during drug development may facilitate the clinical use of pharmacogenomic tests to aid clinicians in optimizing the risk-benefit ratio of iloperidone. The purpose of this review is to summarize the chemistry, pharmacology and clinical aspects of iloperidone, with the goals of identifying key scientific and clinical issues for its use, as well as assessing the potential utility of iloperidone for the treatment of schizophrenia.