Ethnicity is reported to be an important, but often ignored factor in psychopharmacology. However, recent advances in molecular biology and the vision of 'personalised medicine' have spurred a debate on the role of ethnicity in this field. This paper reviews literature on the role of race and ethnicity in psychopharmacology. Despite considerable controversy on what the concepts of ethnicity and race actually measure, they are considered as important proxies for a person's culture, diet, beliefs, health behaviours and societal attitudes. Research has shown ethnic differences in the clinical presentation, treatment, clinical response and outcome of mental illnesses. A number of ethnically specific variations have been found in the genetic and non-genetic mechanisms affecting pharmacokinetics and dynamics of psychotropic drugs, which might underlie the previously mentioned differences in drug use and response across ethnicities. Although some of these ethnic differences could be partially explained by genetic factors, a number of ethnically based variables like culture, diet and societal attitudes could potentially have a significant, but as yet unquantified influence as well. Future research needs to address the problems with defining and accurately measuring 'ethnicity', as well as focus upon conducting studies that could guide treatments for people from diverse backgrounds.