Here’s a very interesting (and long) video on the neurochemistry of psychadelics as of 2010. I’ve done what I can to summarize some main points:
Psychadelics very widely in the types of receptors effect in the brain. However one common receptor for all psychadelics is the serotonin 2A receptor. There are a few key areas in the brain where these receptors exist that help us understand what psychadelics actually do.
Perhaps the most important area is the pyramidal cells in the frontal cortex, which is where our idea of reality comes from. During a trip these areas have a much higher firing frequency. Another key area is a inhibitory layer of tissue called the reticular nucleus that covers the thalamus. The thalamus regulates what external sensory information reaches your cortex, or what you experience, and the reticular nucleus sends inhibitory signals when needed.
The receptors also exist in four areas that affect neurotransmitters. First, the raphe nucleus (R), regulates serotonin levels depending on how alert you are. This fires when you are awake but does not fire at all during REM sleep or after taking psychedelics. Second, the locus coeruleus (LC) uses norepinephrine to focus your attention on something important, such as an attack, before the sensory information reaches your cortex. Psychedelics make the LC fire rapidly as if you’re really attentive. Third, the ventral tegmental area (VTA) rapidly produces dopamine during a trip. Finally, interconnections between the pyramidal cells mentioned above normally release GABA (the inhibitory response of getting drunk). In this way we can focus on one task while the rest of the brain is silent. Psychedelics shut of this release of GABA so that the focus spreads out over many different areas (kind of an induced synesthesia).
So what do psychedelics do? They stimulate the processing areas, change how much and what external sensory information we receive, let you dream while keeping you focused, and lets the information you receive for one part of the brain seep into other areas. And this is just one receptor…