It is now well established that the mammalian brain has the capacity to produce new neurons into adulthood. One such region that provides the proper milieu to sustain progenitor cells and is permissive to neuronal fate determination is located in the dentate gyrus of the hippocampus. This review will discuss in detail the complex process of adult hippocampal neurogenesis, including proliferation, differentiation, survival, and incorporation into neuronal networks. The regulation of this phenomenon by a number of factors is described, including neurotransmitter systems, growth factors, paracrine signaling molecules, neuropeptides, transcription factors, endogenous psychotropic systems, sex hormones, stress, and others. This review also addresses the functional significance of adult born hippocampal granule cells with regard to hippocampal circuitry dynamics and behavior. Furthermore, the relevance of perturbations in adult hippocampal neurogenesis to the pathophysiology of various disease states, including depression, schizophrenia, epilepsy, and diabetes are examined. Finally, this review discusses the potential of using hippocampal neurogenesis as a therapeutic target for these disorders.