Trees are vital resources for economic, environmental, and industrial growth, supporting human life directly or indirectly through a wide variety of therapeutic compounds, commodities, and ecological services. Pterocarpus marsupium Roxb. (Fabaceae) is one of the most valuable multipurpose forest trees in India and Sri Lanka, as it is cultivated for quality wood as well as pharmaceutically bioactive compounds, especially from the stem bark and heartwood. However, propagation of the tree in natural conditions is difficult due to the low percentage of seed germination coupled with overexploitation of this species for its excellent multipurpose properties. This overexploitation has ultimately led to the inclusion of P. marsupium on the list of endangered plant species. However, recent developments in plant biotechnology may offer a solution to the overuse of such valuable species if such advances are accompanied by technology transfer in the developing world. Specifically, techniques in micropropagation, genetic manipulation, DNA barcoding, drug extraction, delivery, and targeting as well as standardization, are of substantial concern. To date, there are no comprehensive and detailed reviews of P. marsupium in terms of biotechnological research developments, specifically pharmacognosy, pharmacology, tissue culture, authentication of genuine species, and basic gene transfer studies. Thus, the present review attempts to present a comprehensive overview of the biotechnological studies centered on this species and some of the recent novel approaches for its genetic improvement.