Chronic deep brain stimulation (DBS) has become a widely accepted surgical treatment for medication-refractory movement disorders and is under evaluation for a variety of neurological disorders. In order to create opportunities to improve treatment efficacy, streamline parameter selection, and foster new potential applications, it is important to have a clear and comprehensive understanding of how DBS works. Although early hypothesis proposed that high-frequency electrical stimulation inhibited neuronal activity proximal to the active electrode, recent studies have suggested that the output of the stimulated nuclei is paradoxically activated by DBS. Such regular, time-locked output is thought to override the transmission of pathological bursting and oscillatory activity through the stimulated nuclei, as well as inducing synaptic plasticity and network reorganization. This chapter reviews electrophysiological experiments, biochemical analyses, computer modeling and imaging studies positing that, although general principles exist, the therapeutic mechanism(s) of action depend both on the site of stimulation and on the disorder being treated.