We survey recent results on reaction-diffusion equations with discontinuous hysteretic nonlinearities. We connect these equations with free boundary problems and introduce a related notion of spatial transversality for initial data and solutions. We assert that the equation with transverse initial data possesses a unique solution, which remains transverse for some time, and also describe its regularity. At a moment when the solution becomes nontransverse, we discretize the spatial variable and analyze the resulting lattice dynamical system with hysteresis. In particular, we discuss a new pattern formation mechanism—rattling, which indicates how one should reset the continuous model to make it well posed. © Springer International Publishing Switzerland 2016.