Lysergic acid diethylamide (LSD) is a hallucinogenic agent. In the mid-20th century, it was used to augment psychoanalysis and to treat alcohol use disorder. However, LSD was banned in 1970 in part because of concerns that it could bring about or exacerbate mental illness. Its therapeutic potential remains incompletely understood. While uncontrolled recreational use of LSD can, in rare instances, lead to long-term psychosis, adverse events in clinical trials of LSD, such as anxiety, headache, and nausea, have almost always been mild and transient. Serious adverse events, such as intense panic, suicidal ideation, and psychosis, were reported in either none or very few of the participants. However, patient selection criteria, optimal dosing strategy, and appropriate clinical follow-up guidelines remain to be established. Preliminary data suggest that LSD may be effective for the management of alcohol use disorder, anxiety, and depression. In trials of LSD for treating anxiety and depression associated with life-threatening illnesses, 77% of participants demonstrate durable relief at 1 year post-treatment. Top-line data from a large-scale phase IIb trial (n = 198) indicate that 50% of participants experience remission from generalized anxiety disorder after a single 100 μg dose of LSD. According to a meta-analysis of RCTs on LSD from the mid-20th century, single-dose regimens of LSD significantly improve alcohol use disorder (P < 0.0003) with an odds ratio (OR) of 1.96. Only one large-scale clinical trial (>50 participants) has been conducted on LSD in the contemporary era of psychedelic research. Further studies with large sample sizes are needed to explore potential clinical applications. Preliminary data suggest that LSD may be one of the most potent treatments for anxiety in patients both with and without a life-threatening illness. LSD may also be beneficial for treating depression and substance use disorders.