The intersection of psychedelic compounds and psychiatry represents a rapidly evolving frontier with the potential to significantly impact the treatment of mental illness and addiction. Psychedelics such as lysergic acid diethylamide (LSD), psilocybin, and 3,4-Methylenedioxymethamphetamine (MDMA) have demonstrated promising therapeutic effects in recent studies, marking a resurgence of interest in their clinical application. This resurgence is grounded in historical use within psychiatry, where psychedelics showed promise in treating conditions like alcohol and nicotine use disorders, posttraumatic stress disorder (PTSD), and depression before concerns about their abuse potential and adverse effects contributed to their prohibition in the 1970s.Contemporary research highlights the treatment potential of psychedelic-assisted therapies, though it also notes rare adverse events from nonmedical use. The administration of psychedelic-assisted therapy involves a triphasic approach: preparation, drug therapy sessions, and integration, aiming to enhance therapeutic efficacy and minimize harm. Theoretical mechanisms of action include psychological flexibility, ego dissolution, mystical experiences, and alterations in brain network activity.Despite a favorable safety profile in research settings, potential risks include challenging emotional experiences, induction of psychosis in susceptible individuals, and rare cases of hallucinogen-persisting perception disorder. Classic psychedelics have a low risk of compulsive use, while MDMA's addictive potential is considered greater but still low.The role of consultation-liaison (C-L) psychiatry in the context of psychedelic therapy could expand significantly, involving patient identification for therapy, managing adverse effects from nonmedical use, and contributing to interdisciplinary research and clinical practice. The potential FDA approval of psychedelic-assisted therapies necessitates preparation by the psychiatric community to address ethical challenges, ensure equitable access, and maintain quality and safety in administration.As psychedelic research continues to grow, it presents an opportunity for psychiatry to integrate these treatments thoughtfully and cautiously, potentially reducing suffering from mental illness and addiction. This evolving landscape calls for a balanced assessment of risks and benefits, the development of specialized training programs, and a reevaluation of psychedelic-focused education in psychiatry. With cautious optimism and a data-grounded approach, psychedelics could significantly enrich psychiatric practice and patient care.