In the last 20 years there has been an increased interest in research on psychedelic compounds for treatment of psychiatric conditions such as depression, anxiety and substance use disorders. Despite existing treatments being efficacious for many patients, this is not the case for up to a third of the patients with depression. Additionally, treatments are often long and associated with side effects. This review focuses on the psychedelic compound psilocybin, a serotonin-2A-receptor agonist that has been seen to reduce depression and anxiety in patients after administration of only a single dose, with effects lasting several weeks. Recent findings from phase II studies suggest that psilocybin treatment for depression is safe and efficacious. A phase III study is currently recruiting. Whether psychedelics will become a part of standard healthcare remains to be seen, but findings do give rise to cautious optimism.