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The high symptomatic and biological heterogeneity of major depressive disorder (MDD) makes it very difficult to find broadly efficacious treatments that work against all symptoms. Concentrating on single core symptoms that are biologically well understood might consist of a more viable approach. The Research Domain Criteria (RDoC) framework is a trans-diagnostic dimensional approach that focuses on symptoms and their underlying neurobiology. Evidence is accumulating that psychedelics may possess antidepressant activity, and this can potentially be explained through a multi-level (psychobiological, circuitry, (sub)cellular and molecular) analysis of the cognitive systems RDoC domain. Cognitive deficits, such as negative emotional processing and negativity bias, often lead to depressive rumination. Psychedelics can increase long-term cognitive flexibility, leading to normalization of negativity bias and reduction in rumination. We propose a theoretical model that explains how psychedelics can reduce the negativity bias in depressed patients. At the psychobiological level, we hypothesize that the negativity bias in MDD is due to impaired pattern separation and that psychedelics such as psilocybin help in depression because they enhance pattern separation and hence reduce negativity bias. Pattern separation is a mnemonic process that relies on adult hippocampal neurogenesis, where similar inputs are made more distinct, which is essential for optimal encoding of contextual information. Impairment in this process may underlie the negative cognitive bias in MDD by, for example, increased pattern separation of cues with a negative valence that can lead to excessive deliberation on aversive outcomes. On the (sub) cellular level, psychedelics stimulate hippocampal neurogenesis as well as synaptogenesis, spinogenesis and dendritogenesis in the prefrontal cortex. Together, these effects help restoring resilience to chronic stress and lead to modulation of the major connectivity hubs of the prefrontal cortex, hippocampus, and amygdala. Based on these observations, we propose a new translational framework to guide the development of a novel generation of therapeutics to treat the cognitive symptoms in MDD.