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This review focuses on the efficacy and tolerability of lurasidone, which is approved in the USA, Puerto Rico and Canada for the treatment of schizophrenia. In two placebo-controlled, phase II trials, lurasidone 40–120 mg/day was efficacious in reducing the acute symptoms of schizophrenia. In a third phase II trial, the lurasidone groups and haloperidol control group failed to separate from placebo on key endpoints. In two placebo- and active treatment-controlled, phase III trials, lurasidone at dosages of 40–160 mg/day, olanzapine 15 mg/day and quetiapine extended-release (XR) 600 mg/day were efficacious in reducing the symptoms of schizophrenia. In a 12-month, double-blind extension trial, the relapse rate in lurasidone recipients was noninferior to that in quetiapine XR recipients. In a third phase III trial, lurasidone 80 mg/day, but not 40 or 120 mg/day, was more efficacious than placebo for the primary endpoint. In an unpublished trial, there were no significant differences between lurasidone, active comparator and placebo groups on the primary endpoint. Lurasidone was generally well tolerated over the short and longer term. Extrapyramidal symptoms and akathisia occurred in ≈10–13 % of patients. Lurasidone was associated with a low risk of QT interval prolongation, weight gain, metabolic disturbances and hyperprolactinaemia. Further trials against other antipsychotics are needed to fully evaluate its efficacy and tolerability.