Research suggests that the clinical and therapeutic effects of psychedelics are related to their ability to induce a mystical-type experience. One particularly interesting feature of the psychedelic mystical experience is the entity encounter - people who take psychedelics sometimes describe meetings with seemingly autonomous entities which appear to possess intelligence and agency. While there has been little empirical research into psychedelic entity phenomena, qualitative studies and anecdotal reports suggest that entity encounters can have profound and lasting positive after-effects. Based on the existing data, this article argues that there is value in exploring the therapeutic potential of psychedelic entity encounters. Specifically, it proposes three possible ways that entity encounters might mediate the therapeutic effect of the psychedelic mystical experience.