Hypnotherapy is thought to date back to the healing practices of ancient Greece and Egypt. Many religions such as Judaism, Christianity, Islam, and others have attributed trance-like behavior to spiritual or divine possession.

Austrian physician, Franz Mesmer (1734–1815), is credited with being the first person to scientifically investigate the idea of hypnotherapy, in 1779, to treat a variety of health conditions. Mesmer studied medicine at the University of Vienna and received his medical degree in 1766. Mesmer is believed to have been the first doctor to understand the relationship of psychological trauma to illness. He induced a trance-like state, which became known as mesmerism, in his patients to successfully treat nervous disorders. These techniques became the foundation for modern-day hypnotherapy.

Mesmer's original interest was in the effect of celestial bodies on human lives. He later became interested in the effects of magnetism, and found that magnets could have tremendous healing effects on the human body. Mesmer believed that the human body contained a magnetic fluid that promoted health and well being. It was thought that any blockage to the normal flow of this magnetic fluid would result in illness, and that the use of the mesmerism technique could restore the normal flow.

Mesmer performed his technique by passing his hands up and down the patient's body. The technique was supposed to transmit magnetic fluid from his hands to the bodies of his patients. During this time period, there was no clear delineation between health conditions that were physical or psychological in nature. Although Mesmer did not realize it at that time, his treatments were most effective for those conditions that were primarily psychosomatic.

Mesmer's technique appeared to be quite successful in the treatment of his patients, but he was the subject of scorn and ridicule from the medical profession. Because of all the controversy surrounding mesmerism, and because Mesmer's personality was quite eccentric, a commission was convened to investigate his techniques and procedures. A very distinguished panel of investigators included Benjamin Franklin, the French chemist Antoine-Laurent Lavoisier, and physician Jacques Guillotin. The commission acknowledged that patients did seem to obtain noticeable relief from their conditions, but the whole idea was dismissed as being medical quackery.

Hypnotherapy involves achieving a psychological state of awareness that is different from the ordinary state of consciousness. While in a hypnotic state, a variety of phenomena can occur. These phenomena include alterations in memory, heightened susceptibility to suggestion, paralysis, sweating, and blushing. All of these changes can be produced or removed in the hypnotic state. Many studies have shown that roughly 90% of the population is capable of being hypnotized.

This state of awareness can be achieved by relaxing the body, focusing on breathing, and shifting attention away from the external environment. In this state, the patient has a heightened receptivity to suggestion. The usual procedure for inducing a hypnotic trance in another person is by direct command repeated in a soothing, monotonous tone of voice.