Telepsychiatry in the 21st century poses a wide range of legal and ethical challenges. The authors review issues related to licensure, credentialing, privacy, security, confidentiality, informed consent, and professional liability in the use of telepsychiatry services and illustrate the discussion with hypothetical clinical vignettes. It is clear that there will be a need in the immediate future to create legal instruments as well as formal professional ethical guidelines for the practice of telepsychiatry.