In recent years, the use of herbal products has been increasing in developing countries such as Nigeria. The common guava tree (Psidium guajava) is a medium sized tree belonging to the family Myrtaceae which is native to tropical and subtropical countries. It is popular in an indigenous system of folk medicine. Traditionally guava is used for the treatment of various ailments like diarrhoea wounds, rheumatism, lung problems, ulcers etc. Psidium guajava L. contains a number of major pharmacologically active ingredients such as flavonoids, guayavolic acid, guavanoic acid, guajadial, guajaverin and so many other active principles. This review summarizes the current knowledge of major pharmacological constituents with major emphasis on traditional and pharmacological activities. This plant reported to display various biological activities like antidiarrhoeal, antimicrobial, antioxidant, hepatoprotective, anti-allergy, anti-plasmodial, anti-spasmodic, cardioactive, anti-diabetic, anti-inflammatory anti-nociceptive and antitussive activity. In view of its wide pharmacological and biological activities, it seems to be having a great therapeutic potential.