Recent findings have shown that psychedelics reliably enhance brain entropy (understood as neural signal diversity), and this effect has been associated with both acute and long-term psychological outcomes, such as personality changes. These findings are particularly intriguing, given that a decrease of brain entropy is a robust indicator of loss of consciousness (e.g., from wakefulness to sleep). However, little is known about how context impacts the entropy-enhancing effect of psychedelics, which carries important implications for how it can be exploited in, for example, psychedelic psychotherapy. This article investigates how brain entropy is modulated by stimulus manipulation during a psychedelic experience by studying participants under the effects of lysergic acid diethylamide (LSD) or placebo, either with gross state changes (eyes closed vs open) or different stimuli (no stimulus vs music vs video). Results show that while brain entropy increases with LSD under all of the experimental conditions, it exhibits the largest changes when subjects have their eyes closed. Furthermore, brain entropy changes are consistently associated with subjective ratings of the psychedelic experience, but this relationship is disrupted when participants are viewing a video─potentially due to a “competition” between external stimuli and endogenous LSD-induced imagery. Taken together, our findings provide strong quantitative evidence of the role of context in modulating neural dynamics during a psychedelic experience, underlining the importance of performing psychedelic psychotherapy in a suitable environment.