The vast amount of research over the past decades has significantly added to our knowledge of phantom limb pain. Multiple factors including site of amputation or presence of preamputation pain have been found to have a positive correlation with the development of phantom limb pain. The paradigms of proposed mechanisms have shifted over the past years from the psychogenic theory to peripheral and central neural changes involving cortical reorganization. More recently, the role of mirror neurons in the brain has been proposed in the generation of phantom pain. A wide variety of treatment approaches have been employed, but mechanism-based specific treatment guidelines are yet to evolve. Phantom limb pain is considered a neuropathic pain, and most treatment recommendations are based on recommendations for neuropathic pain syndromes. Mirror therapy, a relatively recently proposed therapy for phantom limb pain, has mixed results in randomized controlled trials. Most successful treatment outcomes include multidisciplinary measures. This paper attempts to review and summarize recent research relative to the proposed mechanisms of and treatments for phantom limb pain.