Psychedelic-induced self-transcendent experiences (PI-STEs) can enhance prosocial behavior under certain conditions, potentially enriching collective well-being. This exploratory literature review investigates the relationship between PI-STEs and prosocial behavior, analyzing the potential psychological mechanisms that may mediate this connection. By integrating the current bodies of literature on psychedelics and prosocial behavior, we gain insight into the ways that subjective effects occasioned by psychedelics interrelate with prosocial behavior/attitudes. This paper assesses the following categories of psychological mechanisms: cognitive, emotional, social, beliefs, and behavior. The psychological mechanisms with the most empirical support as potential mediators of PI-STE prosocial effects are as follows: mindfulness, self-transcendent positive emotions, affective empathy, and the perception of social connectedness. This review discusses the potential risks involved with psychedelic use (e.g., acute psychological distress, contraindicated comorbidities), emphasizing the importance of ethical and controlled administration under the care of mental health professionals. Additionally, this paper acknowledges the limitations of the current research, including sample representativeness, methodological constraints, and the challenges of adequately measuring these experiences' subjective nature. Future research directions are discussed, emphasizing the need for rigorous standards and interdisciplinary approaches. Ultimately, this paper aims to analyze potential psychological mediators of PI-STE prosocial effects in hopes of illuminating avenues to enhance prosocial behavior and collective well-being.