Most mental disorders involve dysfunction of the dorsolateral prefrontal cortex (dlPFC), a recently evolved brain region that subserves working memory, abstraction, and the thoughtful regulation of attention, action, and emotion. For example, schizophrenia, depression, long COVID, and Alzheimer's disease are all associated with dlPFC dysfunction, with neuropathology often being focused in layer III. The dlPFC has extensive top-down projections, e.g., to the posterior association cortices to regulate attention and to the subgenual cingulate cortex via the rostral and medial PFC to regulate emotional responses. However, the dlPFC is particularly dependent on arousal state and is very vulnerable to stress and inflammation, which are etiological and/or exacerbating factors for most mental disorders. The cellular mechanisms by which stress and inflammation impact the dlPFC are a topic of current research and are summarized in this review. For example, the layer III dlPFC circuits that generate working memory-related neuronal firing have unusual neurotransmission, depending on NMDA receptor and nicotinic α7 receptor actions that are blocked under inflammatory conditions by kynurenic acid. These circuits also have unusual neuromodulation, with the molecular machinery to magnify calcium signaling in spines needed to support persistent firing, which must be tightly regulated to prevent toxic calcium actions. Stress rapidly weakens layer III connectivity by driving feedforward calcium-cAMP (cyclic adenosine monophosphate) opening of potassium channels on spines. This is regulated by postsynaptic noradrenergic α2A adrenergic receptor and mGluR3 (metabotropic glutamate receptor 3) signaling but dysregulated by inflammation and/or chronic stress exposure, which contribute to spine loss. Treatments that strengthen the dlPFC via pharmacological (the α2A adrenergic receptor agonist, guanfacine) or repetitive transcranial magnetic stimulation manipulation provide a rational basis for therapy.