Herbal essential oils are volatile, natural, complex compounds formed by medicinal plants as secondary metabolites. As reported by international organization for standardization (ISO), the term "essential oils" (EOs) is defined for a product obtained from vegetable raw materials or fruit using distillation with water or steam. The EOs are generally complex mixtures of volatile organic compounds include hydrocarbons (terpenes and sesquiterpenes) and oxygenated compounds (alcohols, esters, ethers, aldehydes, ketones, lactones, phenols, and phenol ethers) compounds. In medicinal plants, the EOs chemical profile usually very varies because of both intrinsic (sexual, seasonal, ontogenetic, and genetic variations) and extrinsic (ecological and environmental aspects) factors, also the EOs composition differs not only in the number and type of molecules but also in their stereochemical structures, and can be very different according to the extraction method. EOs represents a “green” alternative in the nutritional and pharmaceutical fields due to reported antimicrobial, antioxidant, anti-inflammatory and anticancer properties thus, in recent times; EOs has gained great popularity as consumers have developed a particular ever-growing awareness toward the use of natural ingredients, especially in food and household. Therefore, the present review provides a comprehensive summary on the method of preparation of EOs from medicinal plants, chemical composition analysis, their biological and pharmacological effects and their potential benefits on health level. Present information was compiled using keywords “Essential oil, Medicinal Plants and Natural additive in scientific database as Science Direct, Elsevier, PubMed, Google scholar and SID, until 2005 to 2015. EOs have great antimicrobial activity and mostly destroy bacteria, fungi and viruses without harmful effects on consumer’s health. Finding of this study showed that the Thymol, α-Pinene, β-Pinene, Cumin Aldehyde, Carvacrol, Germacrene, Linalool were the main components. Also, EOs have antioxidant, anti-inflammatory and many other pharmacological properties which enhance their potential application. EOs have potential biological and pharmacological activities and so have many applications in pharmaceutical and food industries.