Renewed interest in the use of psychedelics in the treatment of psychiatric disorders warrants a better understanding of the neurobiological mechanisms underlying the effects of these substances. After a hiatus of about 50 years, state-of-the art studies have recently begun to close important knowledge gaps by elucidating the mechanisms of action of psychedelics with regard to their effects on receptor subsystems, systems-level brain activity and connectivity, and cognitive and emotional processing. In addition, functional studies have shown that changes in self-experience, emotional processing and social cognition may contribute to the potential therapeutic effects of psychedelics. These discoveries provide a scientific road map for the investigation and application of psychedelic substances in psychiatry.