This review describes the medical, research and recreational uses of ketamine, an anaesthetic derivative of phencyclidine that has dissociative, analgesic and psychedelic properties. Ketamine has a complex mechanism of action that is further complicated by stereoselectivity; however, antagonism of glutamate NDMA receptors is thought to underlie its analgesic, dissociative and neuroprotective effects. While ketamine use in medical and veterinary settings is well documented and has a good safety record, the increase in its unregulated use outside of such controlled environments is a cause for concern. The impact on higher centres in the brain, particularly altered perception of auditory, visual and painful stimuli, results in a general lack of responsive awareness that puts the recreational user at (often unrecognised) risk of personal harm. The perceptual and mood changes observed in those who have consumed ketamine are highly sensitive to age, dose, route of administration, previous experience and setting. At low doses, stimulant effects predominate and the effect of environmental conditions are significant; with higher doses, psychedelic effects predominate and the effect of the environment diminishes. The potential of ketamine as a novel clinical and research tool is matched by its abuse potential outside medical settings.