<p>Psilocybin, psilocin and the associated tryptamines are psychoactive alkaloids which are naturally biosynthesised by <i>Psilocybe</i> (Fr.) P.Kumm. fungi, commonly referred to as magic mushrooms. These psychoactive fungi were used traditionally in healing rituals, and are now being studied in clinical studies to investigate their benefits as a treatment for a number of mental health disorders. Since these substances are intermittently determined in analytical laboratories, validated methods for fast, accurate and reliable analysis are in demand. The recent promising research investigating the therapeutic potentials of these psychoactive compounds has encouraged academic and commercial activities to further explore the chemistry and biochemistry of these molecules as well as finding advanced methods for production and extraction. We review psychedelic fungi, especially from the genus <i>Psilocybe</i>, focusing on their bioactive compounds and potential therapeutic effects on the mind. Psilocybin and its active metabolite psilocin are the leading alkaloids of psychopharmaceutical curiosity in psychedelic fungi. We highlight the importance of studying and understanding the chemical profiles of their hallucinogenic alkaloids necessary for mental health applications and discuss the challenges of rules and regulations aiming for safer and more practical treatments as well as risk reduction and safety enhancement for the public. Amid legal restrictions, research on psychedelic mushrooms aiming for characterisation of their psychoactive substances and mechanism of action has to continue discovering the value of these potential psychomedicines. This review can pave the way for future research aiming for a deeper understanding of the chemistry of psychedelic fungi which will lead to safer, higher and more consistent clinical performance.</p> Graphical Abstract <p></p>