Stimulus substitution models posit that placebo responses are due to pairings of conditional and unconditional stimuli. Expectancy theory maintains that conditioning trials produce placebo response expectancies, rather than placebo responses, and that the expectancies elicit the responses. We tested these opposing models by providing some participants with information intended to impede the formation of placebo expectancies during conditioning trials and by assessing placebo expectancies. Although conditioning trials significantly enhanced placebo responding, this effect was eliminated by adding expectancies to the regression equation, indicating that the effect of pairing trials on placebo response was mediated completely by expectancy. Verbal information reversed the effect of conditioning trials on both placebo expectancies and placebo responses, and the magnitude of the placebo effect increased significantly over 10 extinction trials. These data disconfirm a stimulus substitution explanation and provide strong support for an expectancy interpretation of the conditioned placebo enhancement produced by these methods.