Potential therapeutic properties of repetitive transcranial magnetic stimulation (rTMS) have been suggested in several psychiatric disorders such as depression, mania, obsessive-compulsive disorder, posttraumatic stress disorder and schizophrenia. By inducing electric currents in brain tissue via a time-varying strong magnetic field, rTMS has the potential to either directly or trans-synaptically modulate neuronal circuits thought to be dysfunctional in these psychiatric disorders. However, in order to optimize rTMS for therapeutic use, it is necessary to understand the neurobiological mechanisms involved, particularly the nature of the changes induced and the brain regions affected. Compared to the growing number of clinical studies on its putative therapeutic properties, the studies on the basic mechanisms of rTMS are surprisingly scarce. rTMS currently still awaits clinical routine administration although,there is compelling evidence that it causes changes in neuronal circuits as reflected by behavioural changes and decreases in the activity of the hypothalamic-pituitary-adrenocortical system. Both alterations suggest regional changes in neurotransmitter/neuromodulator release, transsynaptic efficiency, signaling pathways and in gene transcription. Together, these changes are, in part, reminiscent of those accompanying antidepressant drugs.