This paper provides a critical review of several possible mechanisms at different levels of analysis underlying the effects and therapeutic potential of psychedelics. At the (1) biochemical level, psychedelics primarily affect the 5HT2A receptor, increase neuroplasticity, offer a critical period for social reward learning, and have antiinflammatory properties. At the (2) neural level, psychedelics have been associated with reduced efficacy of thalamo-cortical filtering, the loosening of top-down predictive signaling and an increased sensitivity to bottomup prediction errors, and activation of the claustro-cortical-circuit. At the (3) psychological level, psychedelics have been shown to induce altered and affective states, they affect cognition, induce belief change, exert social effects, and can result in lasting changes in behavior. We outline the potential for a unifying account of the mechanisms underlying psychedelics and contrast this with a model of pluralistic causation. Ultimately, a better understanding of the specific mechanisms underlying the effects of psychedelics could allow for a more targeted therapeutic approach. We highlight current challenges for psychedelic research and provide a research agenda to foster insight in the causal-mechanistic pathways underlying the efficacy of psychedelic research and therapy.