Commonly used neuromodulation techniques such as electrical stimulation or pharmacologic intervention have some technical limitations that preclude dissecting particular cell- or pathway-specific functions in the brain, which is composed of billions of neurons. An advancement of molecular genetics techniques has provided a novel method in neuroscience called optogenetics. Optogenetics uses a combination of genetic and optical methods that provide a means to, with great temporal precision, experimentally control the activation or suppression of specific neuronal sub-populations in heterogeneous brain regions where multiple neuronal subtypes exist; this approach can be performed even on freely moving animals. Thus, this tool can uniquely assist in establishing causality between the disorder and the underlying pathology. Ongoing exploration of pathological mechanisms in various animal models of neuropsychiatric disorders with precise tools such as optogenetics can provide significant advances in the development of more focused approaches to treatment of these disorders. Here, we selectively highlight the major advancements gained by the use of optogenetic tools to uncover at circuit levels mechanisms relevant to neuropsychiatric disorders.