Transdermal administration of olanzapine and pharmaceutically acceptable acid addition salts thereof is described. The method involves treating an individual suffering from or susceptible to psychosis, acute mania or mild anxiety states, particularly those afflicted with schizophrenia or schizophreniform illnesses, by administering olanzapine or a salt thereof through the skin or mucosal tissue, for a time period and at an administration rate effective to alleviate the symptoms of the disease. Pharmaceutical formulations and drug delivery systems for administering olanzapine are provided as well.