Bitter melon (Momordica charantia L.) has traditionally been used as a medicinal food in many developing countries. It is a tropical fruit claimed to have therapeutic effects due to its content of bioactive compounds. The present review is an attempt to highlight the bitter melon varieties, bioactive composition that is linked to its therapeutic effects, especially antidiabetic effect, in vitro and in vivo models, and understanding of the mechanisms of actions of bitter melon that are associated with epidemiological evidences. This paper also outlines a proposed processing scheme aiming to fully utilize bitter melon and add further value to this fruit.