Poor insight into illness is a characteristic and common phenomenon in schizophrenic disorders. Lack of insight may lead to poor clinical outcome, thus, research focused on this phenomenon could help develop effective treatment strategies. The relationship between compliance with treatment and insight is complex and it may be influenced mostly by specific components of insight. The aim of the present study was to review the current definitions of insight, the tools and questionnaires used for its measurement, as well as the relationship between insight and psychopathological symptoms. Three theoretical models developed for the explanation of impaired insight are described; the Psychological Defence Model, the Cognitive Deficit Model, and the Neuropsychological Deficit Model. The neurocognitive bases of impaired insight is given special attention in this article. Administration of second generation antipsychotics and psychosocial interventions (psychoeducation with problem solving procedures and motivating techniques) can improve insight, and enhance compliance with treatment, thus, optimizing long-term therapeutic outcome for schizophrenia patients