This article summarizes a symposium organized and cochaired by Maria Testa and presented at the 2005 Annual Meeting of the Research Society on Alcoholism, in Santa Barbara, California. The symposium explored issues relevant to understanding the function of placebo conditions and to interpreting placebo effects. Cochair Mark Fillmore began with an overview of the use of placebo conditions in alcohol research, focusing on methodological issues. Jeanette Norris and her colleagues conducted a review of studies examining placebo conditions among women. They conclude that expectancy effects are limited to a few domains. Maria Testa and Antonia Abbey presented papers suggesting that placebo manipulations may result in unanticipated compensatory effects in actual or hypothetical social situations. That is, placebo participants may compensate for anticipated cognitive impairment through vigilant attention to situational cues. John Curtin's research suggests that the compensatory strategies of placebo participants appear to involve a sensitization of evaluative control, resulting in improved performance. Kenneth Leonard provided concluding remarks on the meaning of placebo effects and the value of placebo conditions in research.