In theory, research, and practice, mental health professionals have tended to ignore or pathologize the religious and spiritual dimensions of life. This represents a type of cultural insensitivity toward individuals who have religious and spiritual experiences in both Western and non-Western cultures. After documenting the “religiosity gap” between clinicians and patients, the authors review the role of theory, inadequate training, and biological primacy in fostering psychiatry's insensitivity. A new Z Code (formerly V Code) diagnostic category is proposed for DSM-IV: psychoreligious or psychospiritual problem. Examples of psychoreligious problems include loss or questioning of a firmly held faith, and conversion to a new faith. Examples of psychospiritual problems include near-death experiences and mystical experiences. Both types of problems are defined, and differential diagnostic issues are discussed. This new diagnostic category would: a) improve diagnostic assessments when religious and spiritual issues are involved; b) reduce iatrogenic harm from misdiagnosis of psychoreligious and psychospiritual problems; c) improve treatment of such problems by stimulating clinical research; and d) encourage clinical training centers to address the religious and spiritual dimensions of human existence.