Psychedelics, previously associated with stigma and legal controversy, are now at the forefront of renewed psychiatric and neurological investigation. Emerging evidence suggests that substances such as psilocybin, lysergic acid diethylamide (LSD), and ayahuasca offer rapid and sustained therapeutic effects across a variety of mental health conditions, including treatment-resistant depression, post-traumatic stress disorder (PTSD), anxiety disorders, and addiction. This chapter explores the classification, mechanisms of action, and current clinical applications of psychedelics. Psychedelics act primarily through the serotonin 5-HT2A receptor and may induce neuroplastic changes, modulate reward circuits, and produce profound alterations in mood and cognition. Special emphasis is placed on psilocybin, including its neurobiological effects and results from phase II clinical trials. Additionally, the chapter reviews ketamine’s established role in treatment-resistant depression and ongoing trials involving LSD and ayahuasca. While findings are promising, legal, ethical, and safety concerns—particularly in populations with bipolar disorder—necessitate caution and further research. The chapter reviews regulatory issues and highlights the importance of careful clinical use. As the field continues to evolve, psychedelics may emerge as transformative tools in psychiatry, provided they are applied with evidence-based rigor and cultural sensitivity.