Ritual use of ayahuasca, an amazonian Amerindian medicine turned sacrament in syncretic religions in Brazil, is rapidly growing around the world. Because of this internationalization, a comprehensive understanding of the pharmacological mechanisms of action of the brew and the neural correlates of the modified states of consciousness it induces is important. Employing a combination of electroencephalogram (EEG) recordings and quantification of ayahuasca's compounds and their metabolites in the systemic circulation we found ayahuasca to induce a biphasic effect in the brain. This effect was composed of reduced power in the alpha band (8-13 Hz) after 50 minutes from ingestion of the brew and increased slow- and fast-gamma power (30-50 and 50-100 Hz, respectively) between 75 and 125 minutes. Alpha power reductions were mostly located at left parieto-occipital cortex, slow-gamma power increase was observed at left centro-parieto-occipital, left fronto-temporal and right frontal cortices while fast-gamma increases were significant at left centro-parieto-occipital, left fronto-temporal, right frontal and right parieto-occipital cortices. These effects were significantly associated with circulating levels of ayahuasca's chemical compounds, mostly N,N-dimethyltryptamine (DMT), harmine, harmaline and tetrahydroharmine and some of their metabolites. An interpretation based on a cognitive and emotional framework relevant to the ritual use of ayahuasca, as well as it's potential therapeutic effects is offered.