Psilocybin, the psychoactive compound in magic mushrooms, has shown promise in treating various psychiatric conditions such as depression, anxiety, addiction and existential distress from terminal illnesses. However, it remains illegal due to its Schedule I classification. This document summarizes recent research on psilocybin's mechanism of action, efficacy and safety profile based on clinical trials. It also discusses the potential therapeutic areas being investigated as well as limitations and negative effects, concluding that while generally safe, more research is still needed.