BACKGROUND: Evidence suggests that psychedelic-assisted therapy carries transdiagnostic efficacy in the treatment of mental health conditions characterized by low mood and the use of avoidance coping strategies. AIMS: While preliminary evidence suggests that psychological flexibility and emotion regulation processes play an important role within psychedelic therapy, this prospective study addressed methodological gaps in the literature and examined the ability of ayahuasca to stimulate acute states of cognitive reappraisal and long-term changes in psychological flexibility and mood. The study also explored whether moderating factors predisposed participants to experience therapeutic changes. METHODS: Participants (<i>N</i> = 261) were recruited from three Shipibo ayahuasca retreat centers in Central and South America and completed assessments on mood, psychological flexibility, and acute ceremonial factors. Expectancy, demand characteristics, and invalid responding were controlled for with several validity scales. RESULTS/OUTCOMES: Participants reported significant reductions in negative mood after three months, as well as increases in positive mood and psychological flexibility. Acute experiences of reappraisal during the ayahuasca ceremony exerted the strongest moderating effects on increases in positive mood and psychological flexibility. Increases in psychological flexibility statistically mediated the effects of acute psychological factors, including reappraisal, on changes in positive mood. CONCLUSIONS/INTERPRETATION: These results highlight the role of acute psychological processes, such as reappraisal, and post-acute increases in psychological flexibility as putative mechanisms underlying positive outcomes associated with psychedelics. These results also provide support for the integration of third-wave and mindfulness-based therapy approaches with psychedelic-assisted interventions.