Most episodes begin with a cold open in the form of a flashback to Shawn and Gus' childhoods. The flashbacks usually involve Shawn and Gus being taught a lesson by a young Henry Spencer (Shawn's father) (Corbin Bernsen), who wishes that his son would follow in his footsteps and become a law enforcement officer. These lessons often play a role for the climax of the episode. As a child, Shawn was taught by Henry to hone his powers of observation and deduction, often using games and challenges to test him. Each flashback also sets the theme for the episode.

Shawn originally becomes known as a psychic when, after calling in tips on dozens of crimes covered on the news which help the police to close the case, the police become suspicious of his knowledge, theorizing that such knowledge could only come from the "inside" and unwilling to believe that it is merely Shawn having honed his observational skills. To avoid being sent to jail, Shawn uses those skills to convince the police that he is psychic; though the interim police chief warns Shawn that if his "powers" are fake, he will be prosecuted. With no choice but to keep up the act, and having proven himself an effective aid to the police in solving crimes, he establishes a psychic detective agency, Psych, and becomes an outside consultant to the police. Pretending to have psychic powers allows him to engage in strange and comic behavior as he turns real clues into hunches and otherworldly visitations. He enjoys teasing lifelong friend Burton Guster (Gus), a pharmaceutical sales representative, about Gus' eclectic interests as they drive around in a blue Toyota Echo nicknamed "The Blueberry" solving crimes.

Head detective Carlton Lassiter (Timothy Omundson), playfully nicknamed "Lassie" by Shawn and Gus, quietly comes to respect Shawn's crime-solving skills despite doubting his psychic abilities; Lassiter is constantly exasperated by Shawn keeping investigations ongoing and/or infuriated by Shawn's antics. However, junior detective Juliet "Jules" O'Hara (Maggie Lawson) and Chief Karen Vick (Kirsten Nelson) are far less antagonistic – with O'Hara expressing belief in Shawn's abilities while Vick is mum on the subject – and usually willing to give Shawn the leeway he needs to solve cases. Henry and Shawn have a difficult relationship, but despite this, Henry reluctantly helps Shawn on various occasions.

• Shawn Spencer (James Roday) is a freelance consultant with the Santa Barbara Police Department who pretends to be a psychic.
• Burton "Gus" Guster (Dulé Hill) is Shawn's best friend and business partner.
• Carlton "Lassie" Lassiter (Timothy Omundson) is the head detective for the Santa Barbara Police Department.
• Juliet "Jules" O'Hara (Maggie Lawson) is a junior detective for the Santa Barbara Police Department partnered with Lassiter.
• Henry Spencer (Corbin Bernsen) is Shawn's uptight and precise father and a former police sergeant.
• Karen Vick (Kirsten Nelson) is the SBPD Interim Chief and is later named Chief in "Shawn (and Gus) of the Dead" (main seasons 2–8, recurring season 1).
• Lucinda Barry (Anne Dudek) is Lassiter's original partner and love interest in the pilot, she is transferred after Shawn tips off her relationship with Lassiter to the Santa Barbara Police Department (season 1).
• Young Shawn (seasons 1–5: Liam James; seasons 5–6: Skyler Gisondo) is the younger version of Shawn Spencer.
• Young Gus (Carlos McCullers II) is the younger version of Burton "Gus" Guster.
• Buzz McNab (Sage Brocklebank) is a naive but lovable cop who often provides Shawn and Gus with clues.
• Madeleine Spencer (Cybill Shepherd) is a police psychologist who is Shawn's mother and Henry's ex-wife.
• Abigail Lytar (Rachael Leigh Cook) is Shawn's high-school crush, later his girlfriend.
• Winnie Guster (Phylicia Rashad) is Gus' mother.
• Bill Guster (season 2: Ernie Hudson; season 3: Keith David) is Gus' father.
• Mr. Yang (Ally Sheedy) is a serial killer.
• Mary Lightly (Jimmi Simpson) is a department psychologist who is an expert on Mr. Yang.
• Woody the Coroner (Kurt Fuller) is a police coroner with whom Shawn shares a mutual respect.
• Pierre Despereaux (Cary Elwes) is an extremely elusive international art thief.
• Declan Rand (Nestor Carbonell) is a rich criminal profiler.
• Marlowe Viccellio (Kristy Swanson) is a woman Lassiter meets and later marries.

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The show uses White Rock, British Columbia, Canada for its Santa Barbara, California setting.
Anne Dudek's character was written out of the series after the character generated a negative test audience reaction with Lassiter due to their relationship. Maggie Lawson was cast as Juliet O'Hara to serve as a replacement.
The theme song for Psych is "I Know You Know" by The Friendly Indians, series creator Steve Franks's band. Some episodes in the third through eighth seasons use an extended version of "I Know You Know" consisting of the first verse and the chorus, though most episodes use a shortened version consisting of mostly the chorus. In some episodes, the theme song is changed, usually as a tie-in to the theme of the episode to come.

Variations of the theme song include:
• A Christmas-themed version in the Christmas episodes, "Gus' Dad May Have Killed an Old Guy" (2x10), "Christmas Joy" (3x09), and "The Polarizing Express" (5x14)
• A Spanish-sung version in "Lights, Camera... Homicidio" (2x13) and "No Country for Two Old Men" (7x04)
• A Bollywood-themed version sung in Hindi for "Bollywood Homicide" (4x06)
• An a cappella version performed by Boyz II Men in the episodes revolving around Gus' a cappella group, "High Top Fade-Out" (4x07) and "Let's Doo-Wop It Again" (6x13)
• A version recorded by Curt Smith for "Shawn 2.0" (5x08)
• A version sung by Julee Cruise in the Twin Peaks-inspired episode, "Dual Spires" (5x12)
• A superhero-themed version in "The Amazing Psych-Man & Tap-Man, Issue 2" (6x04)
• A The Shining-inspired version for "Heeeeere's Lassie" (6x11)
In the "pilot", Roday improvised by picking up a pineapple and saying, "Should I slice this up for the road?" Since then, pineapples have appeared in every episode as a running gag, whether just one in the background or the actual mention of it. It is Shawn's go-to housewarming gift. The pineapple is a major marketing point for items related to the show on the USA website. Fan movements, such as fan-made websites, have also been dedicated to finding a pineapple or pineapple-related object in each episode.
Following the series finale on March 26, 2014, USA Network aired a live aftershow entitled "Psych After Pshow." The hour-long special was hosted by Kevin Pereira and featured series stars and creator/executive producer Steve Franks.