Agarwood, popularly known as oudh or gaharu, is a fragrant resinous wood of high commercial value, traded worldwide and primarily used for its distinctive fragrance in incense, perfumes, and medicine. This fragrant wood is created when Aquilaria trees are wounded and infected by fungi, producing resin as a defense mechanism. The depletion of natural agarwood caused by overharvesting amidst increasing demand has caused this fragrant defensive resin of endangered Aquilaria to become a rare and valuable commodity. Given that instances of natural infection are quite low, artificial induction, including biological inoculation, is being conducted to induce agarwood formation. A long-term investigation could unravel insights contributing toward Aquilaria being sustainably cultivated. This review will look at the different methods of induction, including physical, chemical, and biological, and compare the production, yield, and quality of such treatments with naturally formed agarwood. Pharmaceutical properties and medicinal benefits of fragrance-associated compounds such as chromones and terpenoids are also discussed.