Psilocybin (also known as psilocybine), is a psychedelic alkaloid of the tryptamine family. It is present in many species of fungi, notoriously those of the genus Psilocybe, such as Psilocybe cubensis and Psilocybe semilanceata, but also reportedly isolated from a dozen or so other genera. Psilocybin-containing mushrooms are commonly called magic mushrooms or simply "shrooms." Effects of psilocybin are comparable to those of a shorter LSD trip, although intensity and duration vary depending on dosage, individual physiology, and set and setting.
Psilocybin is absorbed through the lining of the mouth and stomach. Effects begin 20-45 minutes after ingestion of psilocybin-containing mushrooms, and last from 2-6 hours depending on dose, species, and individual metabolism.
The effects of psilocybin are often pleasant, even ecstatic, including a deep sense of connection to others, and a general feeling of connection to nature and the universe. Difficult trips may occur when psychedelic compounds are taken in a non-supportive or inadequate environment, by an unexperienced person, or in an unexpectedly high dose (see: set and setting).
At low doses, hallucinatory effects occur, including walls that seem to breathe, a vivid enhancement of colors and the animation of organic shapes. At higher doses, experiences tend to be less social and more entheogenic, often catalyzing intense spiritual experiences. For example, in the Marsh Chapel Experiment, which was run by a graduate student at Harvard Divinity School under the supervision of Timothy Leary, almost all of the graduate degree divinity student volunteers who received psilocybin reported profound religious experiences. (A brief video about the Marsh Chapel experiment can be viewed here.) In fact, some people who have eaten the mushrooms without knowing of their hallucinatory effects believe they have had an unprovoked religious experience.
In 2006, a group of researchers from Johns Hopkins School of Medicine led by Roland R Griffiths conducted an experiment assessing the degree of mystical experience and attitudinal effects of the psilocybin experience; this report was published in the journal Psychopharmacology. Thirty volunteers without prior experience with hallucinogens were given psilocybin and methylphenidate (Ritalin) in separate sessions, the methylphenidate sessions serving as a control and active placebo; the tests were double-blind, with neither the subject nor the administrator knowing which drug was being administered. The degree of mystical experience was measured using a questionnaire on mystical experience developed by Ralph W Hood; 61% of subjects reported a "complete mystical experience" after their psilocybin session, while only 13% reported such an outcome after their experience with methylphenidate. Two months after taking psilocybin, 79% of the participants reported moderately to greatly increased life satisfaction and sense of well-being. About 36% of participants also had a strong to extreme “experience of fear” or dysphoria (eg, a “bad trip”) at some point during the psilocybin session (which was not reported by any subject during the methylphenidate session), with about one-third of these (13% of the total) reporting that this dysphoria dominated the entire session. These negative effects were reported to be easily managed by the researchers and did not have a lasting negative effect on the subject’s sense of well-being.  
A very small number of people are unusually sensitive to psilocybin's effects, where doses as little as 0.25 grams of dried Psilocybe cubensis mushrooms (normally a threshold dose of around 2 mg psilocybin) can result in effects usually associated with medium and high doses. Likewise, there are some people who require relatively high doses of psilocybin to gain low-dose effects. Individual brain chemistry and metabolism plays a large role in determining a person's response to psilocybin.
Psilocybin is probably metabolized mostly in the liver where it becomes psilocin, but is also broken down by the enzyme monoamine oxidase. MAO inhibitors have been known to sustain the effects of psilocybin for longer periods of time; people who are taking an MAOI for a medical condition (or are seeking to potentiate the mushroom experience) should be careful.
Mental and physical tolerance to psilocybin builds and dissipates quickly. Taking psilocybin more than three or four times in a week (especially two days in a row) can result in diminished effects. Tolerance dissipates after a few days, so frequent users often keep doses spaced five to seven days apart to avoid the effect.