Gene-by-environment interactions (G×Es) can provide important biological insights into psychiatric disorders and may consequently have direct clinical implications. In this review, we begin with an overview of the major challenges G×E studies have faced (e.g., difficulties replicating findings and high false discovery rates). In light of these challenges, this review focuses on describing examples in which we might begin to understand G×Es on the molecular, cellular, circuit, and behavioral level and link this interaction to altered risk for the development of psychiatric disorders. We also describe recent studies that utilize a polygenic approach to examine G×Es. Finally, we discuss how gaining a deeper understanding of G×Es may translate into a therapeutic practice with more targeted treatments.