Loquat (Eriobotrya japonica Lindl.) is a subtropical fruit tree with high medicinal value native to China. Different organs of loquat have been used historically as folk medicines and this has been recorded in Chinese history for thousands of years. Research shows that loquat extracts contain many antioxidants, and different extracts exhibit bioactivity capable of counteracting inflammation, diabetes, cancer, bacterial infection, aging, pain, allergy and other health issues. Bioactive compounds such as phenolics and terpenoids have been isolated and characterized to provide a better understanding of the chemical mechanisms underlying the biological activities of loquat extracts. As the identification of compounds progresses, studies investigating the in vivo metabolism, bioavailability, and structure–activity relationships, as well as potential toxicity of loquat extracts in animal or cell models are receiving more attention. In addition, genetic studies and breeding of loquat germplasms for high contents of health-benefiting compounds may provide new insight for the loquat industry and research. This review is focused on the main medicinal properties reported and the possible pharmaceutically active compounds identified in different loquat extracts.