The recreational use of nitrous oxide (N2O) has increased over the years. At the same time, more N2O intoxications are presented to hospitals. The incidental use of N2O is relatively harmless, but heavy, frequent and chronic use comes with considerable health risks. Most importantly, N2O can inactivate the co-factor cobalamin, which, in turn, leads to paresthesia’s, partial paralysis and generalized demyelinating polyneuropathy. In some patients, these disorders are irreversible. Several metabolic cascades have been identified by which N2O can cause harmful effects. Because these effects mostly occur after prolonged use, it raises the question of whether N2O has addictive properties, explaining its prolonged and frequent use at high dose. Several lines of evidence for N2O’s dependence liability can be found in the literature, but the underlying mechanism of action remains controversial. N2O interacts with the opioid system, but N2O also acts as an N-methyl-D-aspartate (NMDA) receptor antagonist, by which it can cause dopamine disinhibition. In this narrative review, we provide a detailed description of animal and human evidence for N2O-induced abuse/dependence and for N2O-induced neurotoxicity.