Major depressive disorder (MDD) is a common and debilitating psychiatric disorder. Traditional antidepressants are of limited efficacy and take weeks to months to yield full therapeutic effects. Thus, there is a clear need for effective rapid-acting antidepressant medications. The N-methyl-d-aspartate receptor (NMDA-R) antagonist, ketamine, has received a great deal of attention over the last 20 years due to the discovery that a single subanesthetic dose leads to a rapid antidepressant effect in individuals with treatment-resistant depression. Animal and human research suggest that ketamine's antidepressant effects are mediated by a glutamate surge that leads to a cascade of events that result in synaptogenesis and reversal of the negative effects of chronic stress and depression, particularly within the prefrontal cortex (PFC). Preclinical and clinical data have provided compelling insights into the mechanisms underlying the rapid-acting antidepressant effects of ketamine. This review discusses stress-related neurobiology of depression and the safety, tolerability, and efficacy of ketamine for MDD, along with a review of ketamine's mechanism of action and prospective predictors of treatment response. Research limitations and future clinical prospects are also discussed.