The placebo effect has been seldom studied in the history of medicine. However, during the last decades, the great impact of this phenomenon in clinical practice, ranging from surgical to psychiatric field, has been revealed. Research elucidated both the psychological mechanisms and genetic polymorphisms that affect the susceptibility of individuals to express this phenomenon. We herein review the psychological mechanisms, brain structures (anterior cingulate cortex, nucleus accumbens, dorsolateral prefrontal cortex, insular cortex, thalamus) and neurotransmission systems involved (opioid, dopaminergic, cannabinoid, serotoninergic, cholecystokinin). These are the clue to recognize the polymorphisms that have been identified so far. The biological basis of both the placebo effect and its alter ego, the nocebo effect, are well recognized, and related to corresponding psychological processes. Finally, the implications of the findings in clinical practice and medical training are discussed.