Telephone-delivered psychotherapy has increased utility as a method of service delivery in the current world, where a number of barriers, including economic hardships and limited access to care, may prevent people from receiving the treatment they need. This method of service provision is practical and has the potential to reach large numbers of underserved people in a cost-effective manner. The aim of this paper is to review the state-of-the-art of telephone-delivered psychotherapy and to identify improvements and possible solutions to challenges. Results of randomized controlled trials indicate high client acceptance and positive outcomes with this method of delivering psychotherapy. Nonetheless, psychotherapists wishing to deliver psychotherapy by telephone face a number of challenges, including a lack of control over the environment, potential compromises of privacy and confidentiality, developing therapeutic alliance without face-to-face contact, ethical and legal issues in providing psychotherapy by telephone, handling crisis situations at a distance, and psychotherapist adjustment to conducting psychotherapy in an alternative manner. There remains a need for further research, including direct comparisons of face-to-face psychotherapy with telephone-delivered psychotherapy and feasibility of telephone delivery of psychotherapies other than cognitive behavioral therapy.