The conditions necessary to induce psychomotor sensitization and to promote its expression are not well understood. Two examples are reviewed here of how the circumstances surrounding drug administration ("set and setting") can powerfully modulate the sensitization produced by psychostimulant drugs, such as amphetamine or cocaine. In the first example it is suggested that repeated exposure to psychostimulant drugs may induce "neural sensitization" (i.e., produce relevant adaptations in the nervous system). The circumstances surrounding drug administration may determine, however, whether neural sensitization is expressed in behavior. In the second example it is suggested that the circumstances surrounding drug administration may determine whether sensitization is induced at all, or at least the rate and extent of sensitization produced by a given dose of a drug. It is concluded that psychomotor sensitization is not an inevitable consequence of exposure to psychostimulant drugs, but is the result of interactions amongst the pharmacological actions of drugs and the circumstances surrounding drug administration.