Placebo and nocebo effects have been recognized as clinical phenomena for decades. A thorough investigation of biological and psychological pathways of action, however, has started just recently. Meta-analyses of clinical trials underline the extraordinary clinical relevance of these effects. They reveal that up to 70% of symptom improvement in clinical studies can be attributed to placebo phenomena. In contrast, it has been shown that side effect profiles in placebo groups ("nocebo" phenomena) are similar to side effect profiles in drug groups. Accordingly, side effects occurring during pharmacological treatments have been demonstrated to be significantly affected by psychological patient variables and do not solely rely on the pharmacodynamic properties of the drug. Expectation and conditioning have been identified as two major neuropsychological mechanisms involved in placebo and nocebo effects. Via conditioning, clinically meaningful variations, e.g. of the immune system, can be achieved. Expectations have been shown to be major outcome predictors in biomedical interventions such as cardiac surgery. Neurophysiological and neurobiological pathways of the placebo response have only recently been identified by using neuroimaging techniques. It has been shown that different expectations about symptoms correlated with different neural activity. While we know that expectations and learning are both mechanisms involved in placebo and nocebo responses, their mode of operation, their interplay, and their relative contribution in experimental conditions and clinical routine still remain widely unknown. Ongoing trails have shown that placebo effects induced by expectations effect the neural activity in the spinal cord. But the precise pathways of expectation and conditioning, their mode of operation, their interplay, and their relative contribution in experimental conditions and clinical routine still remain widely unknown. Intriguingly, converging evidence from these studies indicates that placebo and nocebo phenomena involve the very same biological systems targeted by "real" drugs. These studies necessitate further investigations of the neurobiological mechanisms of placebo and nocebo phenomena across different physiological systems and pathophysiological conditions and, most importantly, research on the transfer of these phenomena into clinical practice.