Since its first isolation in 1844, usnic acid [2,6-diacetyl-7,9-dihydroxy-8,9b-dimethyl-1,3(2H,9bH)-dibenzo-furandione] has become the most extensively studied lichen metabolite and one of the few that is commercially available. Usnic acid is uniquely found in lichens, and is especially abundant in genera such as Alectoria, Cladonia, Usnea, Lecanora, Ramalina and Evernia. Many lichens and extracts containing usnic acid have been utilized for medicinal, perfumery, cosmetic as well as ecological applications. Usnic acid as a pure substance has been formulated in creams, toothpaste, mouthwash, deodorants and sunscreen products, in some cases as an active principle, in others as a preservative. In addition to antimicrobial activity against human and plant pathogens, usnic acid has been shown to exhibit antiviral, antiprotozoal, antiproliferative, anti-inflammatory and analgesic activity. Ecological effects, such as antigrowth, antiherbivore and anti-insect properties, have also been demonstrated. A difference in biological activity has in some cases been observed between the two enantiomeric forms of usnic acid. Recently health food supplements containing usnic acid have been promoted for use in weight reduction, with little scientific support. The emphasis of the current review is on the chemistry and biological activity of usnic acid and its derivatives in addition to rational and ecologically acceptable methods for provision of this natural compound on a large scale.