Paeonia suffruticosa possesses various medicinal benefits and has been used extensively in traditional oriental medicine for thousands of years. Paeonol is the main component isolated from the root bark of Paeonia suffruticosa. The pharmacological effects of Paeonia suffruticosa are mostly attributed to paeonol. Paeonol injection has been successfully applied in China for nearly 50 years for inflammation/pain-related indications. Currently, the dosage forms of paeonol approved by China Food and Drug Administration include tablet, injection, and external preparations such as ointment and adhesive plaster. So far, the clinical applications of paeonol are mainly focusing on the anti-inflammatory activity. Studies of other pharmacological activities of paeonol are developing rapidly, and which may play an important role in the future. Besides, substantial mechanisms of pharmacological action of paeonol have been clarified in recent years. In this review, we summarize the pharmacological effects anti-inflammatory, neuroprotective, anti-tumor, anti-cardiovascular diseases and associated mechanisms of action of paeonol up to date.