Fear‐related disorders, mainly phobias and post‐traumatic stress disorder, are highly prevalent, debilitating disorders that pose a significant public health problem. They are characterized by aberrant processing of aversive experiences and dysregulated fear extinction, leading to excessive expression of fear and diminished quality of life. The gold standard for treating fear‐related disorders is extinction‐based exposure therapy (ET), shown to be ineffective for up to 35% of subjects. Moreover, ET combined with traditional pharmacological treatments for fear‐related disorders, such as selective serotonin reuptake inhibitors, offers no further advantage to patients. This prompted the search for ways to improve ET outcomes, with current research focused on pharmacological agents that can augment ET by strengthening fear extinction learning. Hallucinogenic drugs promote reprocessing of fear‐imbued memories and induce positive mood and openness, relieving anxiety and enabling the necessary emotional engagement during psychotherapeutic interventions. Mechanistically, hallucinogens induce dynamic structural and functional neuroplastic changes across the fear extinction circuitry and temper amygdala's hyperreactivity to threat‐related stimuli, effectively mitigating one of the hallmarks of fear‐related disorders. This paper provides the first comprehensive review of hallucinogens' potential to alleviate symptoms of fear‐related disorders by focusing on their effects on fear extinction and the underlying molecular mechanisms. We overview both preclinical and clinical studies and emphasize the advantages of hallucinogenic drugs over current first‐line treatments. We highlight 3,4‐methylenedioxymethamphetamine and ketamine as the most effective therapeutics for fear‐related disorders and discuss the potential molecular mechanisms responsible for their potency with implications for improving hallucinogen‐assisted psychotherapy.