Paeoniaemodi Wall. ex Royle is commonly known as Himalayan paeony has great importance as a food and medicine. The practice of Paeoniaemodi Wall. ex Royle is very ancient and it is conventionally used for a wide range of illnesses in the folk system of medicine because of its wide beneficial phytochemical profile. The main purpose of the current review was the synthesis of recent data on botany, ethnopharmacology, phytochemistry and potential pharmacological mechanisms of action of Paeoniaemodi Wall. ex Royle, thus offering new prospects for the development of new adjuvant natural therapies. Using scientific databases such as PubMed/MedLine, Scopus, Web of Science, ScienceDirect, Google Scholar, Springer, and Wiley, a comprehensive literature search was performed for Paeoniaemodi Wall. ex Royle. For searching, we used the next MeSH terms: “Biological Product/isolation and purification”, “Biological Products/pharmacology”, “Drug Discovery/methods”, “Ethnopharmacology, Medicine”, “Traditional/methods”, “Paeonia/chemistry”, “Plant Extracts/pharmacology”, “Phytochemicals/chemistry”, “Phytochemicals/pharmacology”, “Plants, Medicinal”. The results of the most recent studies were analyzed and the most important data were summarized in tables and figures. Phytochemical research of Paeoniaemodi Wall. ex Royle has led to the isolation of triterpenes, monoterpenes, phenolic acids, fatty acids, organic compounds, steroids, free radicals and some other classes of primary metabolites. In addition, diverse pharmacological activities like antibacterial, antifungal, anticoagulant, airway relaxant lipoxygenase and beta-glucuronidase inhibiting activity, radical scavenging activity, phytotoxic and insecticidal activities have been reported for Paeoniaemodi Wall. ex Royle. Different bioactive compounds of Paeoniaemodi Wall. ex Royle has proven their therapeutic potential in modern pharmacological and biomedical research to cure numerous gastrointestinal and nervous disorders. In future, further in vitro and in vivo therapeutic studies are required to identify new mechanisms of action, pharmacokinetics studies, and new pharmaceutical formulations for target transport and possible interaction with allopathic drugs. Also, new research regarding quality evaluation, toxicity and safety data in humans is needed.