Mind-wandering is a specific state of consciousness, during which attention fully or partially switches from perception of external sensory information to inner mental processes. This state is largely spontaneous, and its content usually cannot be consciously controlled. Thoughts during mind wandering are generated by endogenous mental processes focusing on goals of high personal significance. These thoughts adversely interfere with processing of incoming information, thus leading to decreased efficacy of the ongoing activity, resulting in attentional lapses and errors. Dreaminess as a personality trait is directly related to mind wandering. Switching to the mind-wandering state is related to competition between the motivational value of this process with the motivational value of current explicit activities, and it depends on cognitive (executive) control processes. The motivational value of mind wandering itself depends not only on the personal significance of the current thought content; this state appears also to be one of the basic human needs providing humans with the analysis of past experience and planning future activities, and thus is highly advantageous in a long-term perspective. Mind-wandering is closely related to a number of other psychological phenomena such as reflection, metacognition (meta-consciousness), and mindfulness. The current review distinguishes between these phenomena and presents an approach to consider mind wandering a distinct process hallmarked by adverse effects on the ongoing activity.