The task of defining schizophrenia pathogenesis has fascinated and frustrated researchers for nearly a century. In recent years, unprecedented advances from diverse fields of study have given credence to both viral and developmental theories. This review considers possible mechanisms by which viral and developmental processes may interact to engender schizophrenia. Many of the current controversies in schizophrenia pathogenesis are reviewed in light of the viral hypothesis, including: epidemiological findings and the role of a genetic diathesis, phenotype heterogeneity, abnormalities in excitatory and inhibitory neurotransmitter systems, anomalous cerebral latereralization, and static vs progressive disease. The importance of animal models in elucidating the impact of viral infections on developing neurons is illustrated by recent studies in which neonatal rats are infected with lymphocytic choriomeningitis virus in order to examine alterations in hippocampal circuitry. Finally, consideration is given to a new hypothesis that some cases of schizophrenia could be instigated by a viral infection that disrupts developing inhibitory circuits, consequently unleashing glutamatergic neurotransmission leading to selective excitotoxicity, and a degenerative disease course.