Echinacea (E.) purpurea is a medicinal herb commonly known as the purple coneflower, red sunflower and rudbeckia. Echinacea purpurea, a plant is mostly used to treat respiratory infections. This paper reviews the history, chemistry and pharmacological action of Echinacea species. The Echinacea species, Echinacea angustifolia, Echinacea pallida and Echinacea purpurea have a long history of medicinal use particularly infections, and today Echinacea preparations are the best herbal medicine used in several countries like America, Germany, Australia, Thailand and some other European countries. Mainly Echinacea is focused on its immunomodulatory effects, anti inflammatory and antioxidant effects, anti viral effects, particularly in the prevention and treatment of upper respiratory tract infections. The chemistry and pharmacology action of Echinacea species is well documented and several groups of bioactive constituents, including alkamides and lipophilic alkamides, water-soluble phenolic compounds (mainly caffeic acid derivatives) and polysaccharides, benzalkonium chloride are considered important for its activity. The efficacy of Echinacea is not yet revealed completely. From the available data it is reported Echinacea appears to be well tolerated. However, further investigation and surveillance are necessary to establish the safety profiles of different Echinacea preparations. Safety issues include the possibility of allergic reaction, dose dependent adverse effects and overdose. In this article we have reviewed the role of bioactive compounds and the pharmacological properties of Echinacea purpurea.