Mesolimbic dopaminergic neurons modulate complex circuitry in the ventral forebrain involved in reward processing, although the precise function of the dopaminergic input is debated. Electrophysiological measurements have revealed that mesolimbic dopaminergic neurons can fire in either tonic or phasic modes, and that phasic firing accompanies the alerting or anticipatory phases of reward. However, the neurochemical relevance of this rapid neuronal discharge within the reward processing circuitry is not yet clear, in part because of difficulty in interpretation of extracellular dopamine measurements. Herein, the nature of the information provided by different neurochemical techniques is critically discussed. Classical methods of monitoring dopamine reveal changes in extracellular dopamine resulting from tonic neuronal activity, but do not have the temporal resolution to distinguish concentration transients. However, recent advances in dopamine sensors now enable transient dopamine concentrations resulting from phasic firing to be positively identified and followed on a physiologically relevant timescale. This has enabled demonstrations of discrete, phasic dopamine signals accompanying rewarding or alerting stimuli. Thus, enhanced dopamine release at terminals appears to be coincident with phasic electrical activity at cell bodies. These accumulating data promise to help unravel the precise role of phasic dopamine transmission in reward processing.