Impairments in different forms of behavioral flexibility, such as set-shifting and reversal learning, are some of the most reliable cognitive deficits associated with schizophrenia, and have been attributed to a disruption in frontal lobe functioning. However, recent animal studies have highlighted the distinct functional roles that different subcortical systems interconnected with the prefrontal cortex (PFC) play in different forms of behavioral flexibility. This suggests that dysfunction in these circuits also contribute to the cognitive impairments in these processes observed in schizophrenia. The present review summarizes findings from studies that utilize or rodent studies rodents to elucidate the dissociable contributions that prefrontal cortical, striatal, thalamic and dopaminergic systems make to different component processes of behavioral flexibility, with an emphasis on set-shifting functions mediated by the medial PFC. We also review recent work investigating how different manipulations thought to model certain aspects of schizophrenia affect set-shifting and reversal learning. Lastly, we report novel data describing the effects of subchronic ketamine exposure on these forms of flexibility. Ketamine treatment reduced perseverative tendencies during set-shifting, but impaired reversal learning, suggesting a complex disruption of neural circuits related to the nucleus accumbens shell and orbitofrontal cortex. Viewed collectively, these findings further our understanding of how certain neural abnormalities observed in the schizophrenic brain may relate to impairments in behavioral flexibility. This information may facilitate the development of animal models that resemble the complex disruptions in neural circuitry observed in schizophrenia, which would aid in the discovery of novel targeted pharmacotheraputic approaches to ameliorate cognitive dysfunction linked to these circuits.