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Bixa orellana, known as annatto, has gained significant attention due to its diverse phytochemical composition and wide range of pharmacological activities. This review provides a comprehensive evaluation of the latest advancements in the phytochemistry and pharmacology of B. orellana. The plant is rich in a variety of bioactive compounds, including carotenoids, flavonoids, and tocotrienols, which contribute to its therapeutic potential. Recent studies have highlighted the antioxidative, antimicrobial, anti-inflammatory, and anticancer properties of these compounds, supporting the traditional use of B. orellana in various ethno-medicinal practices. Furthermore, the underlying mechanisms of action of these bioactive constituents are discussed, with an emphasis on their interaction with molecular targets that regulate oxidative stress, inflammation, and cell proliferation. The pharmacokinetics, safety profile, and potential side effects of B. orellana extracts are also reviewed, underscoring the need for further research to establish standardized dosages and formulations. Additionally, the application of advanced extraction techniques and novel delivery systems to enhance the bioavailability and efficacy of B. orellana-derived compounds is explored. This review aims to consolidate the current knowledge on B. orellana, providing insights into its potential as a source of natural therapeutics and laying the groundwork for future research and development in this field. By synthesizing the findings from recent studies, this paper contributes to a deeper understanding of B. orellana’s pharmacological potential, ultimately supporting its integration into modern healthcare practices.