Since the 1990s, advances in the mechanism of action psychedelic drugs such as psilocybin and LSD have led the foundation for a renewed interest for their application in the treatment of various psychiatric disorders. Specifically, accumulating evidence from molecular, behavioral and neuroimaging studies suggests that psychedelics acutely modulate emotion regulation, social interaction and the sense of self via neural mechanisms in healthy subjects that are conceptually relevant for the improvement of affective disorders, e.g. depression (Vollenweider and Kometer 2010 1). Accordingly, early psychedelic-assisted psychotherapy studies posit that therapeutic efficacy of psychedelics to improve depression depends on their capacity to weaken self-driven defense mechanisms and to ease emotion processing and memory blocks, and on the subsequent “working through” of resistance and integration of new insight in the therapeutic relationship to enable enduring positive changes (Leuner 1981 2, Rucker et al. 2016 3). A few controlled and an open clinical trial using psilocybin in cancer patients with depression or in major depression have showed now that psilocybin in conjunction with a supportive setting or psychotherapy improves depression and anxiety after only 1-2 doses enduringly for 3-6 month, presumably mediated by the intensity and quality of the mystical-type of experience or the phenomenon of self-dissolution (Ross et al. 2016 4, Griffiths et al. 2016 5, Carhart-Harris et al. 2016 6). In this presentation, I will discuss recent research strategies with psychedelics and advances to identify molecular, cellular, and system-based correlates of psychedelic-induced alterations of the sense of self, emotion processing, and social interactions as relevant for the treatment of depression. Furthermore, I will review the current knowledge on potential predictors shaping the acute and sustained effects of psychedelics in healthy subjects and patients. Notably, a better understanding of the key mechanism of action of psychedelics and of the key predictors of outcome may allow on the long run to fine-tune and tailor psychedelic-assisted therapy models.