This study was designed to resolve whether experimental placebo responses are due to either increased compliance or habituation. We stimulated both forearms and recorded laser-evoked potentials from 18 healthy volunteers treated on one arm with a sham analgesic cream and an inactive cream on the other (treatment group), and 13 volunteers with an inactive cream on both arms (controls). The treatment group showed a significant reduction in the pain ratings and laser-evoked potentials with both the sham and inactive creams. The control group showed no evidence of habituation to the laser stimulus. The results indicate that the reduction in pain during experimental placebo response is unlikely to be due to sensory habituation or compliance with the experimental instructions.