Psychedelic drugs have a long history of use in healing ceremonies, but despite renewed interest in their therapeutic potential, we continue to know very little about how they work in the brain. Here we used psilocybin, a classic psychedelic found in magic mushrooms, and a task-free functional MRI (fMRI) protocol designed to capture the transition from normal waking consciousness to the psychedelic state. Arterial spin labeling perfusion and blood-oxygen level-dependent (BOLD) fMRI were used to map cerebral blood flow and changes in venous oxygenation before and after intravenous infusions of placebo and psilocybin. Fifteen healthy volunteers were scanned with arterial spin labeling and a separate 15 with BOLD. As predicted, profound changes in consciousness were observed after psilocybin, but surprisingly, only decreases in cerebral blood flow and BOLD signal were seen, and these were maximal in hub regions, such as the thalamus and anterior and posterior cingulate cortex (ACC and PCC). Decreased activity in the ACC/medial prefrontal cortex (mPFC) was a consistent finding and the magnitude of this decrease predicted the intensity of the subjective effects. Based on these results, a seed-based pharmaco-physiological interaction/functional connectivity analysis was performed using a medial prefrontal seed. Psilocybin caused a significant decrease in the positive coupling between the mPFC and PCC. These results strongly imply that the subjective effects of psychedelic drugs are caused by decreased activity and connectivity in the brain’s key connector hubs, enabling a state of unconstrained cognition.