Ketamine has been available for approximately 50 years as an anesthetic agent. It is known to have potent effects on the central nervous system glutamatergic system, in particular blockade of N-methyl-d-aspartate (NMDA) receptors. Based upon pre-clinical evidence of involvement of the glutamatergic system in mood disorders, studies have been undertaken to test the antidepressant properties of ketamine. Several well-controlled studies, along with open-label case series, have established that ketamine can have rapid antidepressant effects. Additionally, data exist showing benefits of ketamine in post-traumatic stress disorder as well as obsessive compulsive disorder. However, improvements in these conditions tend to be short-lived with single infusions of ketamine. Of concern, ketamine has been associated with neurotoxicity in pre-clinical rodent models and is well-known to cause psychotomimetic effects and addiction in humans. While ketamine has been proven safe for use in sub-anesthetic doses administered once or a few times, the safety profile of prolonged use has not been established. Aspects of safety, possible mechanisms of action, and future directions of ketamine research are discussed in addition to the clinical literature on its use in psychiatric conditions.