Psychedelic therapies can engender enduring improvements in psychological well-being. However, relatively little is known about the psychological mechanisms through which the salutary effects of psychedelics emerge. Through integrating extant research on psychedelics with contemporary existential psychology, we present a novel hypothesis that reduced death anxiety may be a key mechanism underpinning the therapeutic effects of psychedelics. In developing this hypothesis, we also provide a complementary review of mechanisms through which psychedelics may reduce death anxiety. We conclude that an awareness of the role of death anxiety in psychopathology has the potential to guide future research into psychedelic therapies.