How can the sole administration of a sham treatment -a placebo, trigger psychological and physiological changes that mimic the action of active medication? Placebo effects are a wellknown phenomenon from clinical research to everyday life. In this chapter we define the placebo effect as behavioral and physiological responses to a person's external (e.g., place, social cues, physical attributes of the treatment) and internal (e.g. thoughts, memories, emotions, expectancies) world during treatment. We describe where in the brain, and how a placebo gets translated into an effect from the pain domain to neurological disease such as Parkinson's disease to everyday life behavior -outside the medical domain. We discuss how psychological processes such as learning, prognostic expectancies and motivation together with their associated brain activation potentially mediate placebo effects. The overview of the growing literature on placebo effects and closely related phenomena reveals that placebo effects are an umbrella term for many different subprocesses, which may engage different and interacting brain systems. Identifying and probing the psychological and neurophysiological factors that determine placebo effects is an intriguing scientific puzzle that shed lights on mindbrain-body interactions, and how they shape human behavior.