Litsea cubeba (Lour.) Pers. of the family Lauraceae has been well appreciated for its marked contributions in the field of aromatherapy. Apart from this, the plant is also very popular in traditional and folklore medicine of many countries of the world like China, India, Myanmar, Indonesia, Thailand, and Vietnam. Traditionally, different parts of the plant, viz. leaf, fruit, and root have been used in the treatment of cough and cold, stomachache, toothache, insomnia, hypertension, and hyperglycemia. The rising demand for herbal medicine in the recent years has brought an avenue for exploration and validation of the traditional knowledge by in vitro, in vivo, and in silico pharmacological experiments. The synergistic experimental outcome has concluded that the essential oils and extracts of different parts of this plant contain amides (cubebamine A, etc.), flavonoids (medioresinol, salvigenin, etc.), polyphenols (eugenol, etc.), alkaloids (boldine, reticuline, etc.), terpenoids (cubelin, citral, etc.), fatty acids (capric acid, lignoceric acid, etc.), and many other bioactive compounds which are responsible for its wide range of antimicrobial, insecticidal, antioxidant, anticancer, anti-inflammatory, antidiabetic, cardioprotective, and immunomodulatory activities. Further exploration of the therapeutic potential and molecular mechanism of the bioactive compounds from this plant would help to meet the gap between traditional knowledge and scientific evidence and thus would lead to a promising outcome in the field of herbal medicine. The prime objective of this chapter is to present an overview of traditional usage and to assess the status of phytochemical and pharmacological studies that validate these reports. It also attempts to highlight the research work that needs to be conducted to realize the full potentiality of this plant.