Emerging evidence indicates that treatment context profoundly affects psychopharmacological interventions. We review the evidence for the interaction between drug application and the context in which the drug is given both in human and animal research. We found evidence for this interaction in the placebo response in clinical trials, in our evolving knowledge of pharmacological and environmental effects on neural plasticity, and in animal studies analyzing environmental influences on psychotropic drug effects. Experimental placebo research has revealed neurobiological trajectories of mechanisms such as patients' treatment expectations and prior treatment experiences. Animal research confirmed that "enriched environments" support positive drug effects, while unfavorable environments (low sensory stimulation, low rates of social contacts) can even reverse the intended treatment outcome. Finally we provide recommendations for context conditions under which psychotropic drugs should be applied. Drug action should be steered by positive expectations, physical activity, and helpful social and physical environmental stimulation. Future drug trials should focus on fully controlling and optimizing such drug. ×. environment interactions to improve trial sensitivity and treatment outcome.