The discussions about what placebo means and how its effect occurs go far back in the history of medicine. In general medicinal understanding, placebo means the subjective feeling of a positive effect in response to something that is used for curative intentions. In spite of difficulties in its definition and unknown content, its existence is generally accepted. What is discussed is its level of effectiveness in any disorder and medication. The placebo effect varies not only among diseases but also among regions and countries. Even the physicians' belief in a placebo increases its effect. Another interesting point about the placebo is its side effects. In many placebo controlled studies, the side effects of the placebo are found to be greater than those of real drugs. Different from other diseases, psychiatric disorders have strong connections with the placebo effect. The results of many studies support this idea. The increasing importance of placebos in psychiatry is really an interesting subject. For some people, the reason for this is hidden in the nature of psychiatric diseases. However, nonpharmacologic placebos such as "inspiration", "convincing", "confidence", and "belief" are believed to play a central role in psychiatry. In this article, placebo (the placebo effect) is defined, the implications of placebo in general medicine or psychiatry are discussed, and specific or nonspecific treatment methods are explained. The effects of a placebo on both the patient and the physician are emphasized. The significance of the placebo effect in psychiatry is also mentioned; and a new point of view, based upon the importance of symbolization and satisfaction is introduced in treatment and related action mechanisms.