Forensic psychiatry is the branch of psychiatry that deals with issues arising in the interface between psychiatry and the law, and with the flow of mentally disordered offenders along a continuum of social systems. Modern forensic psychiatry has benefited from four key developments: the evolution in the understanding and appreciation of the relationship between mental illness and criminality; the evolution of the legal tests to define legal insanity; the new methodologies for the treatment of mental conditions providing alternatives to custodial care; and the changes in attitudes and perceptions of mental illness among the public. This paper reviews the current scope of forensic psychiatry and the ethical dilemmas that this subspecialty is facing worldwide.