The development of addiction involves a transition from casual to compulsive patterns of drug use. This transition to addiction is accompanied by many drug-induced changes in the brain and associated changes in psychological functions. In this article we present a critical analysis of the major theoretical explanations of how drug-induced alterations in psychological function might cause a transition to addiction. These include: (a) the traditional hedonic view that drug pleasure and subsequent unpleasant withdrawal symptoms are the chief causes of addiction; (b) the view that addiction is due to aberrant learning, especially the development of strong stimulus-response habits; (c) our incentive-sensitization view, which suggests that sensitization of a neural system that attributes incentive salience causes compulsive motivation or "wanting" to take addictive drugs; and (d) the idea that dysfunction of frontal cortical systems, which normally regulate decision making and inhibitory control over behavior, leads to impaired judgment and impulsivity in addicts.