Systems-centered therapy (SCT) is a particular form of group therapy based on the Theory of Living Human Systems developed by Yvonne Agazarian. The theory postulates that living human systems survive, develop, and transform from simple to complex through discriminating and integrating information. Corresponding to the small and rigorously defined set of concepts, SCT defines a set of methods, techniques and instruments. SCT practitioners use these with individuals, couples and groups to explore the experience of their differences and work with these to integrate them. Using the method of functional subgrouping, these living human systems increase their ability to see both sides of their issues and resolve them productively. The theory was first developed in Agazarian's 1997 book, Systems-Centered Therapy for Groups, and grew out of her earlier work in group psychotherapy under the influence of such figures as W. R. Bion and John Bowlby through the further input of the general systems theory of Ludwig von Bertalanffy.

Systems-centered theory explains how living human systems contain their energy within functional boundaries and direct it towards their goals: the primary goals of survival and development and the secondary goals of environmental mastery. In SCT training groups, all members work in functional subgroups rather than work alone. Subgroups work both sides of every issue in the group-as-a-whole. This practice strengthens both the therapeutic capacity of the training group and allows individual members to choose which side of the conflict has therapeutic salience for their own personal work.

Systems-centered therapy and consultation developed by Yvonne Agazarian is based on the Theory of Living Human Systems, a theory that can be applied to any living human system as small as one individual or a large group and couples, families, classrooms, committees, businesses or even nations. Thus the theory offers a set of ideas for thinking about how living human systems work that can be applied at any level.

The theory defines "a hierarchy of isomorphic systems that are energy-organizing, self-correcting and goal directed" – working on the assumption that psychic patterns will be repeated in the same form (isomorphy)at every nested level of interaction. Each of these constructs is then operationally defined with methods developed that test the hypothesis of the theory. In this way, it offers a comprehensive systems theory and methodology of practice that can be applied in clinical, organizational and educational settings. Most importantly, Agazarian's theory of living human systems introduces the hypothesis that the single essential process by which living human systems survive, develop and transform is by discriminating and integrating differences.

Differences are challenging for people, whether they are differences in opinions, beliefs, ideas, wishes, or feelings. Differences are challenging even when we find them inside of ourselves. Groups often respond to differences that are "too different" by ignoring the differences, avoiding the differences, trying to change or convert the differences or blaming, judging or scapegoating the differences. Groups that respond in these ways to differences can survive unchanged for a long time since anything that challenges the status quo does not become incorporated into the group or is rejected by the group.

Because of this tendency, Systems-centered therapists or consultants pay a lot of attention to communication within the system. They are particularly looking to reduce the defensive "noise" within the communication. Noise is defined as contradictions, (Simon and Agazarian), ambiguities and redundancies (Shannon and Weaver). This concept of noise was developed from work by Shannon and Weaver who formulated observations about the inverse relationship between noise and information transfer. By highlighting and reducing contradiction, ambiguities, and redundancies, i.e. "noise", communication is more effective in transferring information and the system has a better chance of discriminating and integrating its differences.

According to the theory of living human systems, groups that are able to take in and use differences are able to not only survive but also develop and transform. This kind of development enables groups to use their differences as resources to find solutions to problems that are more comprehensive and responsive to the complexity of the problem. They are able to move with less difficulty toward their goals.

In systems-centered therapy, members are taught to manage differences and resolve conflicts by a technique called functional subgrouping. Rather than individual members working alone, functional subgrouping requires that all members of a system that are similar work together to deeply explore their similarity. When that subgroup finishes its exploration, the subgroup holding a difference begins its work, exploring their similarities with one another. Inevitably, as the members of a subgroup talk with each other, they discover differences (i.e., differences within the apparently similar) within their subgroup and also, find similarities with the other subgroup (similarities in the apparently different). By using functional subgrouping, the whole group has a better chance of integrating its differences rather than rejecting differences. When a group can make use of its differences it becomes more complex and interesting akin to the way music is enriched by harmonies or interwoven themes. The group moves from the survival of the status quo to development and transformation.