Zicao, a traditional Chinese herbal medicine documented since the Shennong Ben Cao Jing (Classic of the Divine Husbandman's Materia Medica) in the Eastern Han Dynasty, exhibits significant anti-inflammatory, antitumor, and antibacterial activities. Modern pharmacological research confirms its efficacy in these areas. Commercially available Zicao is derived from multiple species—primarily Arnebia euchroma , Lithospermum erythrorhizon , and Onosma paniculatum —resulting in substantial quality variations. Among these, A. euchroma is recognized as the superior medicinal source. However, its supply is severely constrained by scarce wild resources and challenges in artificial cultivation, leading to frequent substitution with inferior varieties. This review elucidates critical distinctions between A. euchroma and other Zicao species in native habitats, chemical composition, emphasizing A. euchroma possesses unique chemical advantages, characterized by high concentrations of bioactive naphthoquinones (notably β, β-dimethylacrylalkannin, β-hydroxyisovalerylalkannin, and β-acetoxyisovalerylalkannin), polysaccharides, and phenolic acids. These constituents underpin its enhanced anti-inflammatory, antitumor, antioxidant, antimicrobial, neuroprotective, and dermatological activities compared to alternative Zicao sources. By integrating traditional knowledge with modern research, this review provides a scientific foundation for prioritizing A. euchroma in clinical and pharmaceutical applications of Zicao.