Evidence suggests that psilocybin has therapeutic benefit for treating depression. However, there is little consensus regarding the mechanism by which psilocybin elicits antidepressant effects. This systematic review summarizes existing evidence. Ovid MEDLINE, EMBASE, psychINFO, and Web of Science were searched, for both human and animal studies, using a combination of MeSH Terms and free-text keywords in September 2021. No other mood disorders or psychiatric diagnoses were included. Original papers in English were included. The PRISMA framework was followed for the screening of papers. Two researchers screened the retrieved articles from the literature search, and a third researcher resolved any conflicts. Of 2,193 papers identified, 49 were selected for full-text review. 14 articles were included in the qualitative synthesis. Six supported psilocybin’s mechanism of antidepressant action via changes to serotonin or glutamate receptor activity and three papers found an increase in synaptogenesis. Thirteen papers investigated changes in non-receptor or pathway-specific brain activity. Five papers found changes in functional connectivity or neurotransmission, most commonly in the hippocampus or prefrontal cortex. Several neuroreceptors, neurotransmitters, and brain areas are thought to be involved in psilocybin’s ability to mitigate depressive symptoms. Psilocybin appears to alter cerebral blood flow to the amygdala and prefrontal cortex, but the evidence on changes in functional connectivity and specific receptor activity remains sparse. The lack of consensus between studies suggests that psilocybin’s mechanism of action may involve a variety of pathways, demonstrating the need for more studies on psilocybin’s mechanism of action as an antidepressant.