Nocebo is the adverse health event that is induced secondary to negative expectations brought by certain words or actions. It is the counterpart of placebo in clinical trials, where positive effects are brought out secondary to an inert stimulus with the aid of positive expectations. Handling of both placebo and nocebo plays a vital role in achieving the desired treatment effects and avoiding the side effects. Nocebo effect is mediated by distinct neurobiological mechanisms. Studies with functional magnetic resonance imaging show that when pain is expected, there is increased neural activity seen in hippocampus and mid-cingulate gyrus, which is not noted when analgesia is expected.