Several recent studies suggest that placebos administered without deception (i.e., non-deceptive placebos) can help people manage a variety of highly distressing clinical disorders and nonclinical impairments. However, whether non-deceptive placebos represent genuine psychobiological effects is unknown. Here we address this issue by demonstrating across two experiments that during a highly arousing negative picture viewing task, non-deceptive placebos reduce both a self-report and neural measure of emotional distress, the late positive potential. These results show that non-deceptive placebo effects are not merely a product of response bias. Additionally, they provide insight into the neural time course of non-deceptive placebo effects on emotional distress and the psychological mechanisms that explain how they function.