Recent clinical trials of secretin in children with autism showed robust placebo effects and no benefit of secretin over placebo. This article explores the reasons for the observed placebo effects, focusing on the heightening of positive expectancy by media attention and by the sensory experiences associated with intravenous injections. Comparisons are drawn with research involving other novel treatments and other clinical populations of children with developmental disabilities and neurobehavioral disorders. Research regarding mechanisms of placebo effects is reviewed, including patient and clinician attributes, expectancy effects, participation effects, changes in caregiver behavior, and conditioning. New evidence regarding the biological basis of placebo effects is briefly presented. Since placebo effects are ubiquitous and may operate by a variety of mechanisms, research design is critical in designing clinical trials and in evaluating other outcomes research. Measurement issues important for research in developmental disabilities are emphasized. Ethical concerns have been raised regarding the use of placebo in clinical research, but current analysis suggests that placebo controls are necessary and defensible on ethical grounds, if certain conditions are met. The study of placebo effects ("placebology") holds great promise as a new area of research in therapeutics. The author's research in the potential augmentation of stimulant effects in children with attention deficit/hyperactivity disorder (ADHD) by adding placebo in open label is briefly presented. The placebo has always been integral to the practice of medicine, but advances in scientific medicine and medical ethics have diminished the role and use of placebo in practice. An innovative approach to the ethical use of placebo is proposed.