In the 1990s, it is difficult to open a newspaper or watch television and not find someone claiming that magnets promote healing. Rarely do these claims stem from double-blind, peer-reviewed studies, making it difficult to separate the wheat from the chaff. The current fads resemble those at the end of the last century, when many were falsely touting the benefits of direct electrical and weak magnetic stimulation. Yet in the midst of this popular interest in magnetic therapy, a new neuroscience field has developed that uses powerful magnetic fields to alter brain activity—transcranial magnetic stimulation. This review examines the basic principles underlying transcranial magnetic stimulation, and describes how it differs from electrical stimulation or other uses of magnets. Initial studies in this field are critically summarized, particularly as they pertain to the pathophysiology and treatment of neuropsychiatric disorders. Transcranial magnetic stimulation is a promising new research and, perhaps, therapeutic tool, but more work remains before it can be fully integrated in psychiatry's diagnostic and therapeutic armamentarium.