P300 is a late component of evoked potential which meet special relevance to the study of cognitive processes. P300 indexes categorization processes and the context updating of memory. Its latency reflects the stimulus evaluation time, and P300 amplitude is related to some psychological variables such as expectancy, attention and stimulus significance. In this review, clinical correlation between P300 components and mental diseases are reported, especially dementia, schizophrenia and depression. Delayed P300 latency has been found in Alzheimer disease and in other forms of dementia. Reduced P300 amplitude as well as altered topography has been reported in schizophrenia. In depression, reduced P300 amplitude has been related with longer reaction time. Unfortunately, the diagnosis utility of P300 seems limited. The authors also propose an overview of the actual knowledge on neurobiological findings in the generation of the P300 wave. Anatomical data point out the importance of the limbic system, more specifically, of the hippocampus and the locus coeruleus, in generating and modulating P300 wave. Data from the literature on the psychopharmacological modifications induced by cholinergic, catecholaminergic and other agents, are reviewed. Although the dopaminergic and noradrenergic systems are of some importance, these data emphasise the importance of the cholinergic system for the generation and modulation of P300 amplitude and latency. The value and interpretation of these neurobiological and clinical findings are discussed.