Nitrous oxide is a widely used analgesic agent, used also in combination with anaesthetics during surgery. Recent research has raised concerns about possible neurotoxicity of nitrous oxide, particularly in the developing brain. Nitrous oxide is an N-methyl- d-aspartate (NMDA)-antagonist drug, similar in nature to ketamine, another anaesthetic agent. It has been linked to post-operative cardiovascular problems in clinical studies. It is also widely known that exposure to nitrous oxide during surgery results in elevated homocysteine levels in many patients, but very little work has investigated the long term effect of these increased homocysteine levels. Now research in rodent models has found that homocysteine can be linked to neuronal death and possibly even cognitive deficits. This review aims to examine the current knowledge of mechanisms of action of nitrous oxide, and to describe some pathways by which it may have neurotoxic effects.