The fungal genus Psilocybe and other genera comprise numerous mushroom species that biosynthesize psilocybin (4‐phosphoryloxy‐N,N‐dimethyltryptamine). It represents the prodrug to its dephosphorylated psychotropic analogue, psilocin. The colloquial term “magic mushrooms” for these fungi alludes to their hallucinogenic effects and to their use as recreational drugs. However, clinical trials have recognized psilocybin as a valuable candidate to be developed into a medication against depression and anxiety. We here highlight its recently elucidated biosynthesis, the concurrently developed concept of enzymatic in vitro and heterologous in vivo production, along with previous synthetic routes. The prospect of psilocybin as a promising therapeutic may entail an increased demand, which can be met by biotechnological production. Therefore, we also briefly touch on psilocybin's therapeutic relevance and pharmacology.