Yams are the edible subterranean rhizomes, or tubers, of plants from the genus Dioscorea. There are approximately 600 species of yam plants in the world, with more than 90 of these growing in East Asia. One particular species, Dioscorea opposita Thunb., is highly praised as “the Chinese yam”. This distinction arises from millennia of storied history, both as a nutritional food source and as a principal ingredient in traditional Chinese medicine. Among the many cultivars of Dioscorea opposita Thunb., Huai Shanyao has been widely regarded as the best. This review surveyed the historical background, physiochemical composition, applications as food and medicine, and research prospects for the Chinese yam. Modern science is finally beginning to confirm the remarkable health benefits of this yam plant, long-known to the Chinese people. Chinese yam promises anti-diabetic, anti-oxidative, anti-inflammatory, immunomodulatory, anti-hyperlipidemic, anti-hypertensive, anti-cancer, and combination treatment applications, both as a functional food and as medicine.