Valencene and nootkatone, two sesquiterpenes, extracted from natural sources, have great market potential with diverse applications. This paper aims to comprehensively review the recent advances in valencene and nootkatone, including source, production, physicochemical and biological properties, safety and pharmacokinetics evaluation, potential uses, and their industrial applications as well as future research directions. Microbial biosynthesis offers a promising alternative approach for sustainable production of valencene and nootkatone. Both compounds exert various beneficial activities, including antimicrobial, insecticidal, antioxidant, anti-inflammatory, anticancer, cardioprotective, neuroprotective, hepatoprotective, and nephroprotective and other activities. However, most of the studies are performed in animals and in vitro, making it difficult to give a conclusive description about their health benefits and extend their application. Hence, more attention should be paid to in vivo and long-term clinical studies in the future. Moreover, valencene and nootkatone are considered safe for consumption and show great promise in the applications of food, cosmetic, pharmaceutical, chemical, and agricultural industries.