Several recent studies have shown that a single intravenous subanesthetic dose of ketamine, a NMDA receptor antagonist, exerts rapid antidepressant effects in patients with treatment refractory mood disorders and reduces suicidal ideation. Those insights have fueled tremendous excitement in the efforts to elucidate the mechanism underlying ketamine's antidepressant properties in animal models of depression, as well as in humans through the use of brain imaging as well as peripheral blood measurements. For example, there is emerging evidence that ketamine's antidepressant properties rely on increasing AMPA signaling and rapidly inducing synaptogenesis. While pilot clinical studies are promising, a number of critical questions still remain unanswered. They relate to the safe and effective use of ketamine in patients with mood disorders regarding the optimal dose range, modality and method of administration for acute and long-term maintenance of effect, and the biomarkers associated with response/nonresponse. In this review article, we first summarize the clinical evidence about the use of ketamine in mood disorders, as well as preclinical and humans studies which investigated the mechanisms of action of ketamine, and predictors of antidepressant response in clinical populations. We then provide a critical overview of the knowledge gaps about the use of ketamine in depression and suggest some future research directions for the investigation of ketamine as a promising tool to develop novel more effective and fast acting antidepressants.