Despite rapid advances in psychedelic sciences and the increasing number of countries legalizing psychedelics for the treatment of mental illnesses, the attitudes, knowledge and readiness of both mental health consumers and the general population remain largely unknown. A cross-sectional survey was conducted among Australians, targeting individuals with mental illness as potential mental health service users. A sub-sample of individuals free of mental illness was also surveyed to assess attitudes in the general population. Participants completed the Attitudes on Psychedelics Questionnaire, the Basic Knowledge of Psychedelics Test and a questionnaire by Corrigan et al. to capture attitudes toward psychedelic therapy by mental health service users. Of the 502 respondents, 64.5% self-identified as having a mental illness. A significant proportion favored legalizing psychedelics for medical use (43%) and were open to their use (52.4%), yet fewer viewed their effects positively (24%) or considered them safe (33%). Most participants reported to be psychedelic naive (61%). Participants with mental illness had significantly more experience with psychedelics than participant free of mental illness (44.1% vs 29.7%). Experience, perceived knowledge and actual knowledge significantly predicted attitudes toward legalization, effects, risks and openness to psychedelics. While a large proportion of Australians are in favor of legalizing psychedelics for medical purposes, concerns about safety remain. People with self-identified mental illness, those with previous recreational psychedelic experience and those with greater knowledge of psychedelics were more likely to have positive attitudes toward psychedelics and psychedelic-assisted therapy.