Bixa orellana commonly known as annatto is one of the oldest known natural dye yielding plants native to Central and South America. Various parts of annatto have been widely used in the traditional medical system for prevention and treatment of a wide number of health disorders. The plethora of traditional uses has encouraged researchers to identify and isolate phytochemicals from all parts of this plant. Carotenoids, apocarotenoids, terpenes, terpenoids, sterols, and aliphatic compounds are main compounds found in all parts of this plant and are reported to exhibit a wide range of pharmacological activities. In recent years annatto has received tremendous scientific interest mainly due to the isolation of yellow-orange natural dye from its seeds which exhibits high biodegradability, low toxicity, and compatibility with the environment. Considerable research work has already been done and is currently underway for its applications in food, textile, leather, cosmetic, solar cells, and other industries. The present review provides up-to-date systematic and organized information on the traditional usage, phytochemistry and pharmacology of annatto. It also highlights its non-food industrial applications in order to bring more interest on this dye plant, identifies the existing gaps and provides potential for future studies. Studies reported in this review have demonstrated that annatto holds a great potential for being exploited as source of drugs and a potential natural dye. However, further efforts are required to identify extract biomolecules and their action mechanisms in exhibiting certain biological activities in order to understand the full phytochemical profile and the complex pharmacological effects of this plant.