Over the last two decades, the dissociative anaesthetic agent ketamine, an uncompetitive N-Methyl-D-Aspartate (NMDA) receptor antagonist, has emerged as a novel therapy for treatment-resistant depression (TRD), demonstrating rapid and robust antidepressant effects within hours of administration. Ketamine is a racemic mixture composed of equal amounts of (S)-ketamine and (R)-ketamine. Although ketamine currently remains an off-label treatment for TRD, an (S)-ketamine nasal spray has been approved for use in TRD (in conjunction with an oral antidepressant) in the United States and Europe. Despite the promise of ketamine, key challenges including how to maintain response, concerns regarding short and long-term side-effects and the potential for abuse remain. This review provides an overview of the history of ketamine, its use in psychiatry and its basic pharmacology. The clinical evidence for the use of ketamine in depression and potential adverse effects associated with treatment are summarized. A synopsis of some of the putative neurobiological mechanisms underlying ketamine's rapid-acting antidepressant effects is provided before finally outlining future research directions, including the need to identify biomarkers for predicting response and treatment targets that may be used in the development of next-generation rapid-acting antidepressants that may lack ketamine's side-effects or abuse potential.