Psidium guajava L. (guava) is a small tree known for its fruit flavor that is cultivated almost around the globe in tropical areas. Its fruit is amazingly rich in antioxidants, vitamin C, potassium, and dietary fiber. In different parts of the world, this plant holds a special place with respect to fruit and nutritional items. Pharmacological research has shown that this plant has more potential than just a fruit source; it also has beneficial effects against a variety of chronic diseases due to its rich nutritional and phytochemical profile. The primary goal of this document is to provide an updated overview of Psidium guajava L. and its bioactive secondary metabolites, as well as their availability for further study, with a focus on the health benefits and potential industrial applications. There have been several studies conducted on Psidium guajava L. in relation to its use in the pharmaceutical industry. However, its clinical efficacy and applications are still debatable. Therefore, in this review a detailed study with respect to phytochemistry of the plant through modern instruments such as GC and LC-MS has been discussed. The biological activities of secondary metabolites isolated from this plant have been extensively discussed. In order to perform long-term clinical trials to learn more about their effectiveness as drugs and applications for various health benefits, a structure activity relationship has been established. Based on the literature, it is concluded that this plant has a wide variety of biopharmaceutical applications. As a whole, this article calls for long-term clinical trials to obtain a greater understanding of how it can be used to treat different diseases.