Butea monosperma (Lam.) Taub belong to family Fabaceae, widely distributed in India and in all Asian hemispheres. It is a plant that has been electively used in traditional Asian medicines for centuries. It has been used for the treatment of different ailments such as cancer, diabetes, diarrhoea, dysentery, fever and jaundice. Recent in vivo and in vitro studies have indicates its anti-diabetic, anti-cancer, anti-inflammatory, anti-asthmatic, anti-oxidant, anti-convulsant, anti-microbial, anti-viral and hepatoprotective properties. The aerial part of the plant contains a large number of phytochemicals mainly flavonoids, lactones, diterpenoids, diterpene glycosides and phytosterols. This review will discuss the recent findings on the mechanisms, traditional and folk medicinal uses and remarkable biological activity of Butea monosperma.