This review summarizes recent studies of multibubble sonoluminescence (MBSL) in aqueous media in order to highlight new insights into the origin of the sonochemical activity. The observation of OH(CΣ-AΣ) emission band and a spectroscopic analysis of OH(AΣ-XΠ) emission band in MBSL of water pre-equilibrated with noble gases revealed the formation of a nonequilibrium plasma inside the collapsing bubble (T>T>T, where T is an electron temperature, T is a vibrational temperature and T is a rotational (gas) temperature). The T and T estimated using OH(AΣ-XΠ) emission band increase with ultrasonic frequency. In Xe the T of OH(AΣ) state is much higher than in Ar most probably due to the lower ionization potential of Xe. The MBSL of C Swan band (dΠ-aΠ) measured in aqueous tert-butanol (t-BuOH) solutions correlates with the data obtained for OH(AΣ-XΠ) emission band. Analysis of the gaseous products of t-BuOH sonolysis revealed a significant sonochemical activity even at high t-BuOH concentration when MBSL is totally quenched, indicating that drastic intrabubble conditions (plasma) are not necessarily accompanied by sonoluminescence. The nonequilibrium plasma model of cavitation allows to explain the reverse carbon isotope effect observed during the sonolysis of water in the presence of Ar/CO gas mixture.