Introduction: Psilocybin (the active compound found in "magic mushrooms") has been an area of recent focus in the academic and psychiatric community on account of its potential in treating a spectrum of substance use and concurrent disorders (SUCDs). This paper posits a literature review of the current research pertaining to psilocybin in treating alcohol use disorder (AUD) through a form of therapy known as psilocybin-assisted psychotherapy (PAP). Methods: To undertake this study, we performed a literature review of peer-reviewed studies examining the efficacy of psilocybin in treating AUD through PAP. Inclusion criteria for papers included papers published from 2010-present, peerreviewed sources, and clinical studies and controlled experiments observing AUD in PAP settings. Exclusion criteria used in screening papers included those focusing on other psychedelic compounds and experiments examining psilocybin efficacy in non-PAP settings. Results: Our overview of the extant literature has determined that psilocybin has strong therapeutic potential for use in PAP settings to treat AUD. Furthermore, we have identified three principal pathways through which psilocybin can elicit promising effects: neurobiological alterations (e.g., neuroplastic effects), behavioral and psychological improvements (e.g., increased receptivity towards cognitive therapies), and spiritual development (e.g., spiritual encounters improving abstinence). Discussion: The use of psilocybin in the clinical context of AUD treatment is well supported in the field of psychedelic research. Behavioural therapies are of high importance when engaging in use of psilocybin for treating AUD patients. There are certain limitations to the applications of PAP, such as predisposition to certain mental illnesses, however, the future of psilocybin therapy is expansive, ranging from subsequent animal testing to microdosing experiments. Conclusion: While our literature review bears positive findings, we encourage further research and clinical trials to be conducted to establish a larger body of evidence towards supporting or rejecting the validity of PAP. Should future research validate the efficacy of PAP for AUD treatment, therapists and psychiatrists could have another tool in their treatment reserve to assist people with SUCDs.