Lemongrass (Cymbopogon flexuosus) is an aromatic perennial grass grown extensively for its essential oil. Lemongrass oil is chiefly a mixture of various cyclic and acyclic bioactive monoterpenes. We reviewed lemongrass oil and its biosynthesis in the present chapter along with its biochemical composition. Furthermore, we attempted to explore both the possible routes for essential oil biosynthesis in lemongrass, i.e. mevalonate and non-mevalonate pathways and how these pathways interwind with each other. Lemongrass oil has high commercial potential in medicinal, cosmetic, food and energy industries. Regarding the pharmacological properties, a wide array of biological activities has been observed in lemongrass oil such as antimicrobial, insecticidal, analgesic and anti-cancer properties as well as its efficacy as insect-repellent. The later sections were dedicated for the analysis of insecticidal property of the lemongrass oil and the mechanism working behind this phenomenon where it was observed that in addition to synergistic effects, various components of lemongrass oil can also induce specific neurotoxic and cytotoxic responses in the insects.