Forest bathing has beneficial effects on human health via showering of forest aerosols as well as physical relaxation. Terpenes that consist of multiple isoprene units are the largest class of organic compounds produced by various plants, and one of the major components of forest aerosols. Traditionally, terpene-containing plant oil has been used to treat various diseases without knowing the exact functions or the mechanisms of action of the individual bioactive compounds. This review categorizes various terpenes easily obtained from forests according to their anti-inflammatory, anti-tumorigenic, or neuroprotective activities. Moreover, potential action mechanisms of the individual terpenes and their effects on such processes, which are described in various in vivo and in vitro systems, are discussed. In conclusion, the studies that show the biological effectiveness of terpenes support the benefits of forest bathing and propose a potential use of terpenes as chemotherapeutic agents for treating various human diseases.