Six neuropsychological topics illustrating altered perceptions and illusory beliefs are explored with particular emphasis on the neurobiological underpinnings of such phenomena. The first five topics are phantom limb, out-of-body experiences including depersonalization and near-death experiences, delusions with an emphasis on the effects of psychedelic drugs, autonomic reflex actions including respiration and heartbeat, and virtual reality. The last topic focuses on three disorders impairing perception and cognition, namely, Anton-Babinski, Charles Bonnet, and Diogenes Syndromes. Many of the related neurobiological mechanisms reflect disturbances of both lower-level and multisensory processing along with specific cortical impairments such as at the temporoparietal junction. The latter has been linked, for example, to out-of-body experiences. Similarly, aberrant neural learning and signaling such as that based on synaptic receptor disturbances show how the interplay between lower-level brain activity and that in the prefrontal cortex contributes to delusions. Specific hypotheses set forth to explain these alterations in perception and cognition are reviewed, such as a remapping theory which depicts cortical reorganization in response to synaptic changes mediated by receptors. The effects of these perceptual/cognitive distortions on experiential pleasure/pain and on adaptability are also explored.