While nitrous oxide (N2O) has demonstrated antidepressant properties in treatment-resistant major depression (TRD), little is known about neural mechanisms mediating these effects. Employing serial resting-state functional magnetic resonance imaging (rsfMRI), we compared spatiotemporal effects of inhaled N2O on brain functional connectivity in TRD patients (n=14) and non-depressed healthy controls (n=16, CNTL). Participants received sequential, one-hour inhalations of either 50% N2O/oxygen or air/oxygen (placebo), with sessions separated by at least one month in random cross-over order. BOLD-contrast rsfMRI scans were acquired at three time points: pre-inhalation, 2 hours post-inhalation, and 24 hours post-inhalation. For the rsfMRI functional connectivity analyses, five a priori seeds in medial limbic structures targeted cortical networks implicated in major depression, the salience, anterior and posterior default mode, reward, and cingulo-opercular networks, and a nexus in the dorsal paracingulate region previously identified in MDD (dorsal nexus). Depression, dissociation, and psychosis assessments were made before and after inhalations. In TRD patients, functional connectivity was reduced in all seeded networks and the voxel-wise global analysis after N2O exposure. N2O progressively decreased connectivity in patients with TRD but increased connectivity in healthy controls. In TRD patients, each seeded network demonstrated post-inhalation functional connectivity reductions in the dorsal paracingulate gyrus (dorsal nexus). This study further elucidates neural mechanisms underlying the antidepressant properties of N2O, supporting the notion that N2O specifically alters mood-associated brain regions in the depressed brain state by reducing functional connectivity within these brain networks.