Brain scans of people under the influence of psilocybin - the active ingredient in magic mushrooms - show that brain activity is suppressed by the drug.
And, says the Imperial College London team, it enhances personal memories, meaning it could one day be used alongside psychotherapy to treat depression.
"Psychedelics are thought of as 'mind-expanding' drugs, so it has commonly been assumed that they work by increasing brain activity, but surprisingly, we found that psilocybin actually caused activity to decrease in areas that have the densest connections with other areas," says Professor David Nutt, from the Department of Medicine at Imperial College London.
"These hubs constrain our experience of the world and keep it orderly. We now know that deactivating these regions leads to a state in which the world is experienced as strange."
Volunteers, on a placebo or psilocybin, were prompted to think about memories associated with strong positive emotions while inside the scanner. They were also asked to rate changes in their emotional wellbeing two weeks later.
They rated their recollections as being more vivid after taking psilocybin, and with psilocybin there was increased activity in areas of the brain that process vision and other sensory information.
The more vivid their memories, the better they were feeling after two weeks.
The volunteers reported all the usual effects of mushrooms, including geometric patterns, unusual bodily sensations and altered sense of space and time. And the intensity of these effects correlated with a drop in oxygenation and blood flow in two parts of the brain - the posterior cingulate cortex, believed to have a role in consciousness and self-identity, and the medial prefrontal cortex, which is hyperactive in depression.
"Psilocybin was used extensively in psychotherapy in the 1950s, but the biological rationale for its use has not been properly investigated until now. Our findings support the idea that psilocybin facilitates access to personal memories and emotions," says Imperial's Dr Robin Carhart-Harris.
"Previous studies have suggested that psilocybin can improve people's sense of emotional wellbeing and even reduce depression in people with anxiety."