Abstract: Perception and memory are usually the result of combined stimulus-driven and subjectspecific processes. The latter can be examined within the life sciences program only to the degree to which they are defined in operational terms, not in phenomenal terms. This operational definition should refer to goal-related top-down processing to emphasize the autonomy and independence of subject-specific processes from automatic, bottom-up driven processes. Top-down processes can be experimentally dissociated from stimulus-controlled processes by introducing conflict or ambiguity to the bottom-up signal and observing how subjects resolve this ambiguity. By these means, several studies have demonstrated biasing influences of subject-specific expectations and beliefs on task performance that has traditionally been interpreted in terms of sensitivity to the bottom-up signal. These subjectspecific top-down effects can apparently be regulated flexibly at any given moment. On the one hand, they seem to be enacted before the bottom-up input is analyzed, as if they reflected the default setting of the system. On the other hand, stimulus-specific information can disrupt and alter such biases as has been shown for emotionally negative stimuli. The neural basis of these interactions involves the prefrontal cortex. Signals from the prefrontal cortex seem to affect mnemonic and perceptual processes by biasing local competition between bottom-up driven patterns. Patients with dysfunctions in this part of the brain are prone to experiences that have no objective correlate in the outside world, and/or fail to flexibly and adaptively adjust top-down driven processing biases in accord with the requirements of the current situation (e.g., its affective significance). It is concluded that biased beliefs distort our perception, memory, emotional evaluation, and therefore decision-making. To understand the mechanisms underlying these interactions, a multidisciplinary approach is needed that combines human, animal, and neurocomputational research approaches.