Parasite-induced alteration of host behaviour is a widespread transmission strategy among pathogens. Understanding how it works is an exciting challenge from both a mechanistic and an evolutionary perspective. In this review, we use key examples to examine the proximate mechanisms by which parasites are known to control the behaviour of their hosts. Special attention is given to the recent developments of post-genomic tools, such as proteomics, for determining the genetic basis of parasitic manipulation. We then discuss two novel perspectives on host manipulation (mafia-like strategy and exploitation of host compensatory responses), arguing that parasite-manipulated behaviours could be the result of compromises between host and parasite strategies. Such compromises may occur when collaborating with the parasite is less costly for the host in terms of fitness than is resisting parasite-induced changes. Therefore, even when changes in host behaviour benefit the parasite, the host may still play some role in the switch in host behaviour. In other words, the host does not always become part of the parasite's extended phenotype. For example, parasites that alter host behaviour appear to induce widely disseminated changes in the hosts' central nervous system, as opposed to targeted attacks on specific neural circuits. In some host-parasite systems, the change in host behaviour appears to require the active participation of the host (e.g., via host immune-neural connections). Even when the change in host behaviour results in clear fitness benefits for the parasite, these behavioural changes may sometimes be produced by the host. Changes in host behaviour that decrease the fitness costs of infection could be selected for, even if these changes also benefit the parasite.