Functional dizziness is the present term of vertigo and dizziness syndromes that manifest with one or more vestibular symptoms such as vertigo or dizziness, unsteadiness, or imbalance of stance and gait but without a causative organic etiology. Such syndromes were formerly named somatoform or psychogenic vertigo and dizziness. In the International Classification of Diseases (ICD-11; WHO, International Classification of Diseases, 11th edition, beta draft. 2015), “vestibular symptoms” are now used independently from their origin in organic, psychiatric, and functional vertigo and dizziness syndromes. A consensus document, as part of the International Classification of Vestibular Disorders of the Bárány Society—the authoritative International Society of Neurotology—elaborated in 2017 the new term “persistent postural-perceptual dizziness” (PPPD) as a subcategory of functional vertigo and dizziness. This was based on long-lasting experiences and several common findings in syndromes such as the phobic postural vertigo (PPV), space-motion discomfort (SMD), visual vertigo (VV), and chronic subjective dizziness (CSD). Studies on these precursors of PPPD and on PPPD identified a number of functional alterations in balance mechanisms which will be depicted here. Patients with vestibular migraine are at a particularly high risk of developing a functional dizziness; this possibility should be considered early in the patient management and application of therapeutic concepts.