There are speculations that beta-adrenergic blocking agents are useful in the treatment of psychiatric disorders. Clinically, propranolol, an agent of this group, has been investigated in the treatment of various clinical disorders including schizophrenia, other psychoses, anxiety disorders, and stress reactions. This paper critically evaluates its efficacy in these disorders and provides a useful clinical perspective. In addition, propranolol produces a number of psychiatric side effects which are due to its central action or due to the peripheral receptor blockade. In addition, idiosyncratic reactions as well as withdrawal effects have also been reported to produce psychiatric side effects. It is important that the physician who wishes to use this drug know the existing knowledge of its usefulness in the treatment of psychiatric disorders as well as its psychiatric side effects.