The word “psychedelic” (psyche (i.e., the mind or soul) and delos (i.e., to show)) has Greek origin and was first coined by psychiatrist Humphry Osmond in 1956, who had been conducting research on lysergic acid diethylamide (LSD) at the time. Psychedelic drugs such as N,N-DMT/DMT (N,N-dimethyltryptamine), 5-MeO-DMT (5-methoxy-N,N-dimethyltryptamine), LSD (lysergic acid diethylamide), MDMA (3,4-methylenedioxymethamphetamine) and psilocybin have had significant value as an entheogen in spiritual, religious (shamanic) and sociocultural rituals in Central and South American cultures for thousands of years. In the 1960s, the globalization of these drugs and their subsequent spread outside of their indigenous, old-world cultures, led to the subsequent implementation of strict drug control laws in many Western countries. Even today, psychedelics are still classified as Schedule I drugs, resulting in a still lingering negative stigmatization/perception, vilification, and ultimate criminalization of psychedelics. This controversy still lingers and still limits scientific research and full medical acceptance. For many years up until recently, the spiritual, religious and medicinal value of these drugs could not be explored in a scientific context. More recently, a second wave of psychedelic research is now focusing on psychedelics as neuropharmaceuticals to treat alcohol and tobacco addiction, general mood and anxiety disorders and cancer-related depression. There is now a vast array of promising evidence-based data to confirm the years of anecdotal evidence of the medicinal values of psychedelics. Natural therapeutic alternatives such as psychedelic drugs may provide a safe and efficacious alternate to conventional drugs used to treat mood and anxiety disorders. In a Western context in particular, psychedelic drugs as therapeutic agents for mood and anxiety disorders are becoming increasingly of interest amidst increasing rates of such disorders globally, changing social constructions, the implementation of government regulations and increasing investment opportunities, that ultimately allow for the scientific study to generate evidenced-based data. Alternative psychotherapeutic interventions are gaining interest also, because of their low physiological toxicity, relatively low abuse potential, safe psychological effects, and no associated persisting adverse physiological or psychological effects during and after use. On the other hand, conventional psychotic drugs and anti-depressants are becoming less favorable because of their adverse side effects. Psychedelic neuropharmaceutical interventions may with medical oversight be the solution to conventional psychiatric disorders such as depression and anxiety, and an alternative to conventional psychiatric treatment options. This paper will review the therapeutic potential of psychedelic drugs as alternative therapeutic options for mood and anxiety disorders in a controlled, clinical setting, where the chances of adverse psychological episodes occurring are mitigated.