Nature has selected osmolytes to protect intracellular macromolecules against denaturing stress conditions. These molecules are accumulated in the intracellular environment at considerably high concentrations. In general, osmolytes are known to stabilize proteins. However, under certain conditions, their destabilizing properties have also been pointed out. A careful qualitative and quantitative understanding of the mechanism of action of osmolytes with proteins from native to different stages of aggregation/fibrillation is extremely important in rational drug design. This review highlights the importance of naturally occurring osmolytes in protein folding, stabilization, and prevention of fibrillation/aggregation related diseases among others. Continued efforts are required to get quantitative insights into osmolyte-protein interactions along with experimental evidences for the much claimed preferential exclusion/preferential hydration phenomenon of osmolyte action. Mechanistic insights into the disease associated roles of osmolytes needs special attention.