Abstract: Aquilariae Lignum Resinatum formed in the Aquilaria sinensis (Lour.) Gilg, is the highly valuable product which was commonly used for incenses, perfumes and medicines. In this paper, chemical composition and pharmacological activity of Aquilariae Lignum Resinatum were reviewed. Its chemical composition included monoterpenes, sesquiterpenes, diterpenoids, triterpenes, steroids, flavonoids, benzyl acetones, chromones, phenolic acids and aliphatic compounds. Its pharmacological activity included anti-bacterial, anti-tumor and acetylcholinesterase inhibitive effects, etc. This will provide a reference for further development of the agarwood.