Celastrus paniculatus is a traditional herb belonging to the family Celastraceae and is widely used for a number of medicinal activities in the Indian Unani and Ayurvedic systems. In this study, the extensive literature search was carried out on phytochemistry, ethnobotanical uses and pharmacological activities of C. paniculatus (Willd.) in various scientific databases as well as patents. Research on phytochemical investigation has shown the presence of monoterpenes (linalool, α‐terpinyl acetate, nerol acetate), sesqueterpene esters (such as malkanguniol, malkangunin, valerenal, globulol, viridiflorol, cubenol and agarofuran derivatives), diterpenoids (such as phytone, isophytol), triterpenoids (such as lupeol, pristimerin, paniculatadiol, zeylasteral, zeylasterone, β‐amyrin, squalene), alkaloids (celapanin, celapanigin, celapagin, paniculatine, celastrine, maymyrsine), fatty acids, steroids (β‐sitosterol, carpesterol benzoate), flavonoids (paniculatin), benzoic acid, and vitamin C in this plant. All the reported pharmacological activities of this plant could be due to the presence of these phytochemicals. This plant possesses strong antioxidant activity which includes total flavonoid content, total phenolic content, nitric oxide scavenging activity and free radical scavenging activity. This plant possesses multiple pharmacological activities including cognition‐enhancing, neuroprotective, antipsychotic, anti‐depressant, antibacterial, anti‐arthritic, anti‐malarial, analgesic, anti‐inflammatory, anti‐fertility, cardiovascular, locomotor, anxiolytic, wound healing activity, anti‐spasmodic, hypolipidemic, anti‐cancerous and iron‐chelating activity with different extracts of this plant as well as various phytoconstituents present in this plant. The objective of this review article is to discuss in detail the reported ethnopharmacological uses, phytochemistry and various pharmacological activities of C. paniculatus.