Psychosis occurs commonly in patients with mood disorders and has traditionally been treated with typical antipsychotics. Exposure to typical antipsychotics poses a risk for the emergence of tardive dyskinesia. Atypical antipsychotics may have advantages over typical agents in the treatment of patients with mood disorders complicated by psychotic features. The studies of typical and atypical antipsychotics in the treatment of mood disorders were reviewed. Similarly, studies regarding the risk of tardive dyskinesia from typical and atypical agents in patients with mood disorders were surveyed. Typical and atypical antipsychotics appear to be comparably effective in the treatment of acute mania. Limited data regarding these medications in psychotic depression are available. Advantages of atypical antipsychotics include, for most agents, minimal extrapyramidal and prolactin effects, inherent thymoleptic activity, and lower rates of tardive dyskinesia. Atypical antipsychotics appear to have a number of advantages over typical agents in the treatment of patients with psychotic mood disorders.