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Aloysia gratissima is a plant native to America, with applications in folk medicine for a wide range of diseases, such as bronchial infections, lung disorders, nervous system disorders (depression, anxiety), and inflammatory processes, among others. However, investigations about this species and its biological actions are still scarce. This literature review was carried out using articles published in the past 30 years on the PubMed, SciELO, and Web of Science platforms, with the focus on the method of extraction, chemical composition, and clinical and preclinical studies on the pharmacological properties of A. gratissima. We noticed that the main constituents of A. gratissima are guaiol, pinocamphone, ß-pinene, and 1,8-cineole. Additionally, preclinical studies reveal that A. gratissima extracts present antidepressant, anti-inflammatory, antinociceptive, antibacterial, antifungal, and virucidal effects. The results also demonstrate that there is a greater interest on the part of researchers from 2012 onwards in studying A. gratissima extracts with potential for possible new drugs.