Applied psychology is the use of psychological methods and findings of scientific psychology to solve practical problems of human and animal behavior and experience. Educational and organizational psychology, business management, law, health, product design, ergonomics, behavioural psychology, psychology of motivation, psychoanalysis, neuropsychology, psychiatry and mental health are just a few of the areas that have been influenced by the application of psychological principles and scientific findings. Some of the areas of applied psychology include counseling psychology, industrial and organizational psychology, engineering psychology, occupational health psychology, legal psychology, school psychology, sports psychology, community psychology, neuropsychology, medical psychology and clinical psychology, evolutionary psychology, human factors, forensic psychology and traffic psychology. In addition, a number of specialized areas in the general area of psychology have applied branches (e.g., applied social psychology, applied cognitive psychology). However, the lines between sub-branch specializations and major applied psychology categories are often mixed or in some cases blurred.

For example, a human factors psychologist might use a cognitive psychology theory. This could be described as human factor psychology or as applied cognitive psychology. When applied psychology is used in the treatment of behavioral disorders there are many experimental approaches to try and treat an individual. This type of psychology can be found in many of the subbranches in other fields of psychology.

The founder of applied psychology was Hugo Münsterberg. He came to America (Harvard) from Germany (Berlin, Laboratory of Stern), invited by William James, and, like many aspiring psychologists during the late 19th century, originally studied philosophy. Münsterberg had many interests in the field of psychology such as purposive psychology, social psychology and forensic psychology. Hugo Münsterberg is credited with being one of the first people who has researched the field of applied psychology. He went to the University of Leipzig in Germany and attained his doctorate in Medicine. He opened the second psychology clinic in Germany in 1891 where he has continued his research. In 1907 he wrote several magazine articles concerning legal aspects of testimony, confessions and courtroom procedures, which eventually developed into his book, On the Witness Stand. The following year the Division of Applied Psychology was adjoined to the Harvard Psychological Laboratory. Within 9 years he had contributed eight books in English, applying psychology to education, industrial efficiency, business and teaching. Eventually Hugo Münsterberg and his contributions would define him as the creator of applied psychology. In 1920, the International Association of Applied Psychology (IAAP) was founded, as the first international scholarly society within the field of psychology.

Most professional psychologists in the U.S. worked in an academic setting until World War II. But during the war, the armed forces and the Office of Strategic Services hired psychologists in droves to work on issues such as troop morale and propaganda design. After the war, psychologists found an expanding range of jobs outside of the academy. Since 1970, the number of college graduates with degrees in psychology has more than doubled, from 33,679 to 76,671 in 2002. The annual numbers of masters' and PhD degrees have also increased dramatically over the same period. All the while, degrees in the related fields of economics, sociology, and political science have remained constant.

Professional organizations have organized special events and meetings to promote the idea of applied psychology. In 1990, the American Psychological Society held a Behavioral Science Summit and formed the "Human Capital Initiative", spanning schools, workplace productivity, drugs, violence, and community health. The American Psychological Association declared 2000–2010 the Decade of Behavior, with a similarly broad scope. Psychological methods are considered applicable to all aspects of human life and society.

There are many uses of applied psychology and can be found as a subfield in other genres of psychology. Applied Psychology has been used in teaching psychology because it focuses on the scientific findings and how it can be used to transfer that behavior.  Many people who use applied psychology work in the fields of teaching, industrial, clinical, and consulting work areas. The Encyclopedia of Applied Psychology delves deeper into the many subsections that are used in correlation with this field and further explains the procedures that should be used in each of the respective industries.

Business advertisers have long consulted psychologists in assessing what types of messages will most effectively induce a person to buy a particular product. The three main types of psychologists that participate in creating advertisements are cognitive, media, and social psychologists. These psychologists often work together to create advertisements that create an emotional impact on the viewer in order to make the advertisement more memorable. Using the psychological research methods and the findings in human's cognition, motivation, attitudes and decision making, those can help to design more persuasive advertisement. Their research includes the study of unconscious influences and brand loyalty. However, the effect of unconscious influences was controversial. The use of these psychologists often create successful advertisements with the scientific methods that are used to portray violence, humor and sex.

Educational psychology is devoted to the study of how humans learn in educational settings, especially schools. Psychologists assess the effects of specific educational interventions: e.g., phonics versus whole language instruction in early reading attainment. They also study the question of why learning occurs differently in different situations.