Background Gut-directed hypnotherapy is being increasingly applied to patients with irritable bowel syndrome (IBS) and to a lesser extent, inflammatory bowel disease (IBD). Aim To review the technique, mechanisms of action and evidence for efficacy, and to identify gaps in the understanding of gut-directed hypnotherapy as a treatment for IBS and IBD. Methods A review of published literature and a systematic review of clinical trials in its application to patients with IBS and IBD were performed. Results Gut-directed hypnotherapy is a clearly described technique. Its potential mechanisms of action on the brain-gut axis are multiple with evidence spanning psychological effects through to physiological gastrointestinal modifications. Six of seven randomised IBS studies reported a significant reduction (all P < 0.05) in overall gastrointestinal symptoms following treatment usually compared to supportive therapy only. Response rates amongst those who received gut-directed hypnotherapy ranged between 24% and 73%. Efficacy was maintained long-term in four of five studies. A therapeutic effect was also observed in the maintenance of clinical remission in patients with ulcerative colitis. Uncontrolled trials supported the efficacy and durability of gut-directed hypnotherapy in IBS. Gaps in understanding included to whom and when it should be applied, the paucity of adequately trained hypnotherapists, and the difficulties in designing well controlled-trials. Conclusions Gut-directed hypnotherapy has durable efficacy in patients with IBS and possibly ulcerative colitis. Whether it sits in the therapeutic arsenal as a primary and/or adjunctive therapy cannot be ascertained on the current evidence base. Further research into efficacy, mechanisms of action and predictors of response is required.