More than fifty million individuals worldwide are experiencing neurodegenerative disorders, which include Parkinson's disease, Alzheimer's disease, amyotrophic lateral sclerosis, Huntington's disease, multiple sclerosis, and frontotemporal dementia. These disorders have a significant role in the gradual degradation of cognition and motor skills. Most current treatment approaches have little effect on changing the course of the disease and are largely symptomatic. Psilocybin, a naturally occurring tryptamine alkaloid from psilocybin mushrooms, has become a promising medicinal agent because of its hallucinogenic, neuroprotective, and neuroplastic properties. After being metabolically transformed into its active form, psilocin, it primarily activates serotonin 5-HT2A receptors. This modulates glutamatergic neurotransmission and neurotrophic signaling pathways such as BDNF/TrkB and mTOR, which regulate synaptic remodeling, dendritic complexity, neurogenesis, neuroinflammatory response, and default mode network connectivity, all of which are linked to depression and dementia. Preclinical research studies demonstrate that psilocybin increases hippocampal plasticity, restores dendritic complexity, lowers proinflammatory cytokine levels, and promotes fear extinction in experimental models of stress, ischemic stroke, and neurodegeneration. Emerging clinical studies also indicate that individuals with moderate cognitive impairment, early-onset Alzheimer's disease, and Parkinson's disease may see long-term decreases in anxiety and depression as well as improvements in cognitive function, frequently after a single dose administration. Additionally, psilocybin has demonstrated promise in treating mental comorbidities that often accompany neurodegenerative illness, such as treatment-resistant depression, drug use disorders, and obsessive-compulsive disorder. However, there are still significant obstacles to overcome, such as optimizing dosing schedules, assessing safety issues such as temporary perceptual abnormalities and cardiovascular consequences, and translating preclinical results into extensive phase -III clinical studies. This review incorporates the most recent data on psilocybin's chemistry, pharmacology, metabolism, and mechanistic actions; it highlights the drug's therapeutic potential across a variety of neurodegenerative diseases and emphasizes the necessity of carefully planned randomized controlled trials to determine clinical efficacy, long-term safety, and its place in multimodal treatment approaches.
