Over the 1950s and early 1960s, the use of the hallucinogenic drug lysergic acid diethylamide (LSD) to facilitate psychotherapy was a promising field of psychiatric research in the USA. However, during the 1960s, research began to decline, before coming to a complete halt in the mid-1970s. This has commonly been explained through the increase in prohibitive federal regulations during the 1960s that aimed to curb the growing recreational use of the drug. However, closely examining the Food and Drug Administration’s regulation of LSD research in the 1960s will reveal that not only was LSD research never prohibited, but that the administration supported research to a greater degree than has been recognized. Instead, the decline in research reflected more complex changes in the regulation of pharmaceutical research and development.