Lawsonia inermis L., commonly known as henna, is a multipurpose plant with centuries-old applications in traditional medicine, cosmetics, and rituals across Asia, Africa, and the Middle East. This review provides a comprehensive synthesis of its taxonomy, phytochemistry, pharmacological activities, ethnomedicinal applications, and commercial significance. The plant’s bioactive constituents – including lawsone, flavonoids, phenolics, and terpenoids – underpin its broad therapeutic effects, such as antioxidant, antimicrobial, anti-inflammatory, wound healing, antidiabetic, anticancer, and immunomodulatory activities. Despite extensive traditional use and emerging pharmacological validation, challenges remain regarding extract standardisation, clinical evaluation, and mechanistic understanding. This paper highlights the need for advanced studies, including clinical trials and bioavailability optimisation, to fully harness L. inermis as a scientifically validated phytopharmaceutical. Integrating traditional knowledge with modern research could elevate henna’s role in global healthcare while ensuring its sustainable utilisation.