When one encounters a novel stimulus this sets off a cascade of brain responses, activating several neuromodulatory systems. As a consequence novelty has a wide range of effects on cognition; improving perception and action, increasing motivation, eliciting exploratory behavior, and promoting learning. Here, we review these benefits and how they may arise in the brain. We propose a framework that organizes novelty's effects on brain and cognition into three groups. First, novelty can transiently enhance perception. This effect is proposed to be mediated by novel stimuli activating the amygdala and enhancing early sensory processing. Second, novel stimuli can increase arousal, leading to short-lived effects on action in the first hundreds of milliseconds after presentation. We argue that these effects are related to deviance, rather than to novelty per se, and link them to activation of the locus-coeruleus norepinephrine system. Third, spatial novelty may trigger the dopaminergic mesolimbic system, promoting dopamine release in the hippocampus, having longer-lasting effects, up to tens of minutes, on motivation, reward processing, and learning and memory.