Essential oils (EOs) are extracted from flowers, leaves, barks, roots, and fruits of the medicinal plants using hydrodistilation or steam distillation and continuous solvent extraction. EOs are mixture of chemical constituents which have less molecular weight substances, such as alcohols, polyphenols, terpenoids, carbonyl compounds, and aliphatic compounds which provide smell and possess biological properties. EOs have been used as folk medicine throughout the history. Nowadays, EOs are widely used as an alternative medicine in varied industries such as pharmaceutical, agricultural, sanitary, and food industries due to their antibacterial, antifungal, antiviral, antiparasitical, antidiabetic, anticancer (cytotoxic), insect repellent, food industry (flavoring), aromatherapy, antioxidant, perfume, and cosmetic properties. EOs have a great demand and interest as cosmetic and pharmaceutical substances. The isolation, identification, and characterization of major components of EOs have a premier significance. Individual compounds present in EOs mixture such as thymol, camphor, limonene, α-pinene, terpinolene, menthol, menthone, etc. exhibit wide-ranging biological properties. Commercially, still synthetic chemicals are widely used as biological activities than the EOs from the plants. However, EOs from natural sources are more effective and safe for human health and the environment compared to the synthetic chemicals. The aim of the present chapter is to discuss the specific chemical compounds occurring in EOs, their medical applications, and economic importance.