In this paper the application of computer technology and the use of the Internet in mental health care are critically reviewed. A number of on-line screening devices have been developed for anxiety disorders, mood disorders, and substance abuse disorders, with great potential for clinical practice. On line assessment is generally equivalent to clinical assessment. A number of studies have shown that self-help treatment programmes on stand-alone computers are as effective as routine clinical care. The Internet enhances the therapeutic possibilities of computers by offering feedback of therapists and more tailor-made treatment. A number of randomized clinical trials (RCTs) have shown that Internet-based treatment is more effective than no-treatment and as effective as face-to-face treatment. Research so far has been limited to anxiety disorders, burn-out, depression, headache, insomnia, tinnitus and obesity. Further, exposure through virtual reality has been found effective in a number of RCTs in specific phobias, but results with respect to the effects of the use of virtual reality techniques to other disorders are inconclusive. It is concluded that computer-driven assessment and treatment has many advantages and few disadvantages. A number of reasons are discussed which will preclude large-scale implementation of computer-driven assessment and therapy in the near future.