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The Pterocarpus marsupium belong to family Fabaceae and is widely distributed in central, western and southern regions of India. The role of Pterocarpus marsupium as anti-diabetic has been very well established. Its extract has been prepared using many methods like infusion, maceration, decoction and percolation. Several chemical constituents like pterostilbene, (-)-epicatechin, pteropines, marsupinol, etc., have been identified and isolated. Pterocarpus marsupium extract also shows promising results in cataract and hypertriglyceridemia. This plant also finds its use as cardiotonic and hepatoprotective agent. Studies have also been reported to demonstrate its ability as a specific COX- 2 inhibitor. The present review explores its description, traditional uses, extraction methods, chemical constituents, pharmacological activity and commercial significance so that its potential as a multipurpose medicinal agent can be understood and appreciated.