Canthaxanthin is an orange-red keto-carotenoid that occurs naturally and is also manufactured by synthetic methods for regular applications. In nature, canthaxanthin mainly exists in microbes such as different bacterial species, fungi, and algae, as well as in animals such as crustaceans, certain fishes, and birds. However, the amount of canthaxanthin produced in these organisms varies significantly. Additionally, the compound can be generated from genetically modified organisms using genetic engineering techniques Canthaxanthin finds extensive application as an additive in animal feed, in the pharmaceutical industry, as a coloring agent for various food products, and in cosmetics. It has powerful antioxidant properties and plays a role in lipid metabolism, neuroprotection, and immunomodulation. This article gives an extensive insight into the structure and methods of synthesis of canthaxanthin along with its various newly discovered sources identified so far. The significant applications of canthaxanthin, particularly its role in pharmaceuticals, are critically evaluated. Furthermore, the article discusses future aspects and challenges associated with canthaxanthin production and regulation.