What is Ketamine?
Ketamine is a dissociative anesthetic, and was approved for use in the United States in 1970.  Ketamine was used initially to treat soldiers in the Vietnam War and for emergency field surgery due to its cardiac and respiratory stabilizing effects.  The drug was placed on the World Health Organization's list of Essential Medications in 1985, making it one of only two anesthetics on the list.  Ketamine is most often used in the anesthesia setting, but has been shown to have antidepressant effects when given in low-doses in recent years.
How does ketamine work?
Ketamine is an antagonist of the NMDA receptor, which is one type of receptor for an amino acid called glutamate. Glutamate is the major excitatory neurotransmitter in the brain. The exact mechanism by which ketamine works to treat depression is still uncertain, but there are several hypotheses.
The most widely accepted hypothesis states that, in low doses, ketamine actually increases glutamate transmission and may lead to a "glutamate burst". This increase in glutamate may help build new connections within neurons, and even help regenerate neuronal connections that have been damaged.
What makes ketamine different?
Most traditional antidepressants are monoamine reuptake blockers.  These medications often times take weeks to months to become effective.  This is particularly problematic for patients at an increased risk of suicide, or with existing suicidal ideation.  In contrast, the antidepressant effect of ketamine (including the cessation of suicidal ideation) can be seen in as little as a few hours, and has proven effective for patients who have been unresponsive to traditional therapies.