Synaptic plasticity alters the strength of information flow between presynaptic and postsynaptic neurons and thus modifies the likelihood that action potentials in a presynaptic neuron will lead to an action potential in a postsynaptic neuron. As such, synaptic plasticity and pathological changes in synaptic plasticity impact the synaptic computation which controls the information flow through the neural microcircuits responsible for the complex information processing necessary to drive adaptive behaviors. As current theories of neuropsychiatric disease suggest that distinct dysfunctions in neural circuit performance may critically underlie the unique symptoms of these diseases, pathological alterations in synaptic plasticity mechanisms may be fundamental to the disease process. Here we consider mechanisms of both short-term and long-term plasticity of synaptic transmission and their possible roles in information processing by neural microcircuits in both health and disease. As paradigms of neuropsychiatric diseases with strongly implicated risk genes, we discuss the findings in schizophrenia and autism and consider the alterations in synaptic plasticity and network function observed in both human studies and genetic mouse models of these diseases. Together these studies have begun to point towards a likely dominant role of short-term synaptic plasticity alterations in schizophrenia while dysfunction in autism spectrum disorders may be due to a combination of both short-term and long-term synaptic plasticity alterations.