This paper reviews melatonin as an overlooked factor in the developmental etiology and maintenance of schizophrenia; the neuroimmune and oxidative pathophysiology of schizophrenia; specific symptoms in schizophrenia, including sleep disturbance; circadian rhythms; and side effects of antipsychotics, including tardive dyskinesia and metabolic syndrome. Electronic databases, i.e. PUBMED, Scopus and Google Scholar were used as sources for this review using keywords: schizophrenia, psychosis, tardive dyskinesia, antipsychotics, metabolic syndrome, drug side effects and melatonin. Articles were selected on the basis of relevance to the etiology, course and treatment of schizophrenia. Melatonin levels and melatonin circadian rhythm are significantly decreased in schizophrenic patients. The adjunctive use of melatonin in schizophrenia may augment the efficacy of antipsychotics through its anti-inflammatory and antioxidative effects. Further, melatonin would be expected to improve sleep disorders in schizophrenia and side effects of anti-psychotics, such as tardive dyskinesia, metaboilic syndrome and hypertension. It is proposed that melatonin also impacts on the tryptophan catabolic pathway via its effect on stress response and cortisol secretion, thereby impacting on cortex associated cognition, amygdala associated affect and striatal motivational processing. The secretion of melatonin is decreased in schizophrenia, contributing to its etiology, pathophysiology and management. Melatonin is likely to have impacts on the metabolic side effects of anti-psychotics that contribute to subsequent decreases in life-expectancy.