Postnatal neurogenesis has been observed in two brain regions: the subventricular zone (SVZ) of the lateral ventricle and the subgranular zone (SGZ) of the dentate gyrus in the hippocampus, among vertebrates including human. Accumulating evidence has indicated the molecular mechanisms commonly underlying embryonic and adult neurogenesis. Genetic factors essential for neural development, i.e., Pax6, Fabp7, Sox2, Wnt3, Notch1, etc., are also expressed in adult neurogenic regions. Adult neurogenesis, however, is distinct from embryonic neurogenesis in that the former is activity dependent; environmental stimulation modulates the entire processes of adult neurogenesis. In the hippocampus, physical exercise and cognitive stimuli robustly increase the proliferation of precursor cells, whereas physical/psychosocial stress decreases the proliferation of newborn neurons. Thus, adult neurogenesis is intriguingly regulated by several genetic and environmental factors. Reduction in hippocampal neurogenesis during the infantile and adult stages has been observed in some animal models of mental illness such as schizophrenia and major depression, implicating that postnatal neurogenesis may contribute to a part of the symptoms of mental illness. In this review, we describe the molecular mechanisms and functional significance of postnatal neurogenesis.