Multifunctional finishing agents for textiles are the primary need for the current scenario. To provide a multifunctional effect to textiles, one or more finishing agents are required, which have generally compatibility issues. Natural substance-based finishing agents have the disadvantage of reproducibility and higher add-on percentage is required, which hamper the basic useful properties of textiles. Synthetic material-based multifunctional agents have problems of biocompatibility and have adverse effects on the environment. Recently, vanillin has been explored exponentially in the pharmaceutical industry. Vanillin is a small magical molecule having very interesting properties. In this research, comparative studies of vanillin and its derivatives have been summarized and discussed in detail. Vanillin has excellent biocompatibility, and is eco-friendly in nature. In-situ synthesis of other derivatives of vanillin has been discussed. Further, vanillin and its derivatives have been integrated into polyester (PET) textiles and their functional properties have been studied in detail. It was observed that vanillin derivatives have good wash durability and excellent functional properties in comparison to vanillin alone. Copper complex of vanillin having excellent functional properties has the potential to be explored in various application areas of textiles such as hospitals, sport textiles, hotels, etc. The main advantage of these novel finishing agents is that they require very low add-on percentage that does not hamper the basic physical properties of textiles and provide excellent functional properties such as antimicrobial activity, antioxidant activity, fragrance, UV resistance, and attractive colouration.