Ayahuasca (or caapi in Brazil) is a psychoactive plant beverage initially used by shamans in religious rituals practiced by indigenous peoples in the Amazon region. It is prepared by infusing the pounded stems of Banisteriopsis caapi Morton, a liana which contains beta-carbolines, alkaloids that are potent monoamine oxidase (MAO) inhibitors, together with the leaves of Psychotria viridis Ruiz & Pavón, which contains the psychedelic agent N,N-dimethyltryptamine (DMT). The enzyme MAO normally degrades DMT in the liver and gut. In Brazil, the use of ayahuasca within religious ceremonies is protected by law and it has been incorporated into rituals of syncretic religious groups. Some of these groups have established themselves in the United States and European countries, attracting international research interest in the effects of ayahuasca. Studies suggest that it may have therapeutic applications, such as in the treatment of drug addiction, and that it can be used safely by healthy adults. However, too few studies have been performed for a good assessment of its properties to be made. The aim of this article is to present a review of the history of ayahuasca, up to the recent discoveries concerning its pharmacology and toxicology.