Psycho-oncology is a broad approach to cancer therapy which treats the emotional, social, and spiritual distress which often accompanies cancer patients. The development of psycho-oncology began in the second part of the 20th century reflecting the increased interest in the study of cancer patients' psychological reactions to their illness at all stages of its course, and the analysis of the emotional, spiritual, social, and behavioral factors which influence the risk of developing cancer and long-term aftercare treatment. Today the psycho-oncology has become an accepted part of cancer treatment, with departments of psycho-oncology established in most major cancer centers in Canada, the United States and many Western European countries. A key clinical challenge for the oncologist is differentiating the expected and transient distress associated with cancer from the excessive, disabling distress requiring psychiatric interventions. One third of patients with cancer will experience distress which requires evaluation and treatment, and the most common psychiatric disorders are depression, anxiety disorders and adjustment disorders. Psychiatrists should be involved in the multidisciplinary treatment team who work with the cancer patients. Further research is needed to determine the effectiveness of different psychological and psychopharmacological interventions in psycho-oncology and palliative medicine. Mental health issues should be included in the training of health care professionals in all areas of medicine, psychology and social work to meet the demands of cancer patients.