An emerging theory of schizophrenia postulates that hypofunction of adenosine signaling may contribute to its pathophysiology. This study was designed to test the "adenosine hypothesis" of schizophrenia and to evaluate focal adenosine-based strategies for therapy. We found that augmentation of adenosine by pharmacologic inhibition of adenosine kinase (ADK), the key enzyme of adenosine clearance, exerted antipsychotic-like activity in mice. Further, overexpression of ADK in transgenic mice was associated with attentional impairments linked to schizophrenia. We observed that the striatal adenosine A2A receptor links adenosine tone and psychomotor response to amphetamine, an indicator of dopaminergic signaling. Finally, intrastriatal implants of engineered adenosine-releasing cells restored the locomotor response to amphetamine in mice overexpressing ADK, whereas the same grafts placed proximal to the hippocampus of transgenic mice reversed their working memory deficit. This functional double dissociation between striatal and hippocampal adenosine demonstrated in Adk transgenic mice highlights the independent contributions of these two interconnected brain regions in the pathophysiology of schizophrenia and thus provides the rationale for developing local adenosine augmentation therapies for the treatment of schizophrenia.