In Ayurvedic medicine, East Indian Sandalwood is an important remedy for the treatment of both somatic and mental disorders. In this investigation, the effects of inhalation of East Indian Sandalwood essential oil and its main compound, alpha-santalol, on human physiological parameters (blood oxygen saturation, respiration rate, eye-blink rate, pulse rate, skin conductance, skin temperature, surface electromyogram, and blood pressure) and self-ratings of arousal (alertness, attentiveness, calmness, mood, relaxation and vigor) were studied in healthy volunteers. Compared to either an odorless placebo or alpha-santalol, Sandalwood oil elevated pulse rate, skin conductance level, and systolic blood pressure. alpha-Santalol, however, elicited higher ratings of attentiveness and mood than did Sandalwood oil or the placebo. Correlation analyses revealed that these effects are mainly due to perceived odor quality. The results suggest a relation between differences in perceived odor quality and differences in arousal level.