Placebo is the use of the substance or procedure without specific activity for the condition that is trying to be healed. In medicine, benefits of placebo effect are used since 1985 and 1978 placebo effect was first scientifically confirmed. It was found that placebo induced analgesia depends on the release of endogenous opiates in the brain and that the placebo effect can be undone using the opiates antagonist naloxone. Functional magnetic resonance imaging of the brain showed that placebo analgesia was obtained regarding the activation and increased functional relationship between ant. cingulate, prefrontal, orbitofrontal, and insular cortex, nucleus accumlens, amygdala, periaqueduktalne gray matter and spinal cord. Placebo also facilitates descending inhibition of nociceptive reflexes through periacvaeductal gray substance. Placebo effect can be achieved in several ways: by using pharmacological preparations or simulation of operating or other procedures. This phenomenon is associated with perception and expectation of the patient. To achieve the effect of placebo it is essential degree of the suggestions of the person who prescribe a placebo, and the degree of belief of the person receiving the placebo. Expected effect of placebo is to achieve the same effect as the right remedy. Achieved placebo effect depends on the way of presentation. If a substance is presented as harmful, it may cause harmful effects, called »nocebo« effect. Placebo effect is not equal in all patients, same as the real effect of the drug is not always equal in all patients. Application of placebo in terms of analgesia will cause a positive response in 35% of patients. Almost the same percentage (36%) of patients will respond to treatment with morphine in medium doses (6–8 mg). Therefore, one should remember that response to placebo does not mean that a person simulates the pain and then it is unethical to withhold the correct treatment especially in light of findings that the prefrontal cortex is activated expecting liberation of pain and how this action reduce activities in brain regions responsible for sensation of pain (thalamus, somatosensory cortex and other parts of the cortex). However, the use of placebos is ethically, legally and morally very dubious. The basis for the placebo effect is deception. It undermines honest relationship and trust between doctor and patient which is extremely important for successful treatment. Consciously giving placebos to patients for a condition that can be adequately treated, with prejudice the right of patients to the best care possible, opens up many bioethical issues. Despite all the current knowledge level, placebo effect remains still a scientific mystery.