It is well established that expectation can significantly modulate pain perception. In this study, we combined an expectancy manipulation model and fMRI to investigate how expectation can modulate acupuncture treatment. Forty-eight subjects completed the study. The analysis on two verum acupuncture groups with different expectancy levels indicates that expectancy can significantly influence acupuncture analgesia for experimental pain. Conditioning positive expectation can amplify acupuncture analgesia as detected by subjective pain sensory rating changes and objective fMRI signal changes in response to calibrated noxious stimuli. Diminished positive expectation appeared to inhibit acupuncture analgesia. This modulation effect is spatially specific, inducing analgesia exclusively in regions of the body where expectation is focused. Thus, expectation should be used as an important covariate in future studies evaluating acupuncture efficacy. In addition, we also observed dissociation between subjective reported analgesia and objective fMRI signal changes to calibrated pain in the analysis across all four groups. We hypothesize that as a peripheral-central modulation, acupuncture needle stimulation may inhibit incoming noxious stimuli; while as a top-down modulation, expectancy (placebo) may work through the emotional circuit.