The genetics of schizophrenia has been approached utilizing a variety of methods. One emerging strategy is the use of endophenotypes in order to understand and identify the functional importance of genetically transmitted, brain-based deficits across schizophrenia kindreds. The endophenotype strategy is a topic of this issue of Schizophrenia Bulletin. Endophenotypes are quantitative, heritable, trait-related deficits typically assessed by laboratory-based methods rather than clinical observation. Endophenotypes are seen as closer to genetic variation than are clinical symptoms of schizophrenia, and are therefore closely linked to heritable risk factors. There has been a broad expansion of opportunities available to psychiatric neuroscientists who use the endophenotype strategy to understand the genetic basis of schizophrenia. In this context, genetic variation such as single nucleotide polymorphisms (SNPs) induces abnormalities in endophenotypic domains such as neurocognition, neurodevelopment, metabolism, and neurophysiology. This article discusses the challenges that abound in genetic research of schizophrenia, including issues in ascertainment, epistasis, ethnic diversity, and the potentially normalizing effects of second-generation antipsychotic medications on neurocognitive and neurophysiological measures. Robust strategies for meeting these challenges are discussed in this review and the subsequent articles in this issue. This article summarizes conceptual advances and progress in the measurement and use of endophenotypes in schizophrenia that form the basis of the multisite National Institute of Mental Health Consortium on the Genetics of Schizophrenia. The endophenotype strategy offers powerful and exciting opportunities to understand the genetically conferred neurobiological vulnerabilities and possible new strong inference and molecularly based treatments for schizophrenia.