This review examines dopamine (DA) and glutamate receptor interactions in the neostriatum (NS) primarily from a neurophysiological perspective. Historically, a clear understanding of the function of DA in the NS has been difficult because it was considered a classical neurotransmitter with either excitatory or inhibitory actions and because many of the data were obtained by use of varying methodologies. When DA is considered a neuromodulator whose role is to alter how NS cells respond to glutamatergic inputs, many of its actions can be accounted for and predicted with great accuracy within a model of receptor subtype. In this model, DA via activation of D1 receptors potentiates responses mediated by activation of N-methyl-D-aspartate (NMDA) receptors. DA via activation of D2 receptors attenuates responses mediated by activation of non-NMDA receptors. Outcomes of combinations of NMDA and D2 and non-NMDA and D1 receptors are not as predictable. The mechanisms underlying the D1-NMDA receptor interactions appear to involve alterations in cell excitability mediated by activation of Ca2+ conductances and/or phosphorylation of NMDA receptors. Less is known about mechanisms underlying the D2-non-NMDA receptor interaction. The functional implications of this model in setting membrane potentials, signal-to-noise ratio, plasticity and excitotoxicity are discussed.