Clinical studies have demonstrated that a single sub-anesthetic dose of the dissociative anesthetic ketamine induces rapid and sustained antidepressant actions. Although this finding has been met with enthusiasm, ketamine's widespread use is limited by its abuse potential and dissociative properties. Recent preclinical research has focused on unraveling the molecular mechanisms underlying the antidepressant actions of ketamine in an effort to develop novel pharmacotherapies, which will mimic ketamine's antidepressant actions but lack its undesirable effects. Here we review hypotheses for the mechanism of action of ketamine as an antidepressant, including synaptic or GluN2B-selective extra-synaptic N-methyl-D-aspartate receptor (NMDAR) inhibition, inhibition of NMDARs localized on GABAergic interneurons, inhibition of NMDAR-dependent burst firing of lateral habenula neurons, and the role of α-amino-3-hydroxy-5-methyl-4-isoxazole-propionic acid receptor activation. We also discuss links between ketamine's antidepressant actions and downstream mechanisms regulating synaptic plasticity, including brain-derived neurotrophic factor (BDNF), eukaryotic elongation factor 2 (eEF2), mechanistic target of rapamycin (mTOR) and glycogen synthase kinase-3 (GSK-3). Mechanisms that do not involve direct inhibition of the NMDAR, including a role for ketamine's (R)-ketamine enantiomer and hydroxynorketamine (HNK) metabolites, specifically (2R,6R)-HNK, are also discussed. Proposed mechanisms of ketamine's action are not mutually exclusive and may act in a complementary manner to exert acute changes in synaptic plasticity, leading to sustained strengthening of excitatory synapses, which are necessary for antidepressant behavioral actions. Understanding the molecular mechanisms underpinning ketamine's antidepressant actions will be invaluable for the identification of targets, which will drive the development of novel, effective, next-generation pharmacotherapies for the treatment of depression.