The anaesthetic ketamine is used to treat various chronic pain syndromes, especially those that have a neuropathic component. Low dose ketamine produces strong analgesia in neuropathic pain states, presumably by inhibition of the N-methyl-D-aspartate receptor although other mechanisms are possibly involved, including enhancement of descending inhibition and anti-inflammatory effects at central sites. Current data on short term infusions indicate that ketamine produces potent analgesia during administration only, while three studies on the effect of prolonged infusion (4–14 days) show long-term analgesic effects up to 3 months following infusion. The side effects of ketamine noted in clinical studies include psychedelic symptoms (hallucinations, memory defects, panic attacks), nausea/vomiting, somnolence, cardiovascular stimulation and, in a minority of patients, hepatoxicity. The recreational use of ketamine is increasing and comes with a variety of additional risks ranging from bladder and renal complications to persistent psychotypical behaviour and memory defects. Blind extrapolation of these risks to clinical patients is difficult because of the variable, high and recurrent exposure to the drug in ketamine abusers and the high frequency of abuse of other illicit substances in this population. In clinical settings, ketamine is well tolerated, especially when benzodiazepines are used to tame the psychotropic side effects. Irrespective, close monitoring of patients receiving ketamine is mandatory, particularly aimed at CNS, haemodynamic, renal and hepatic symptoms as well as abuse. Further research is required to assess whether the benefits outweigh the risks and costs. Until definite proof is obtained ketamine administration should be restricted to patients with therapy-resistant severe neuropathic pain.