Eucalyptus oil (EO) and its major component, 1,8-cineole, have antimicrobial effects against many bacteria, including Mycobacterium tuberculosis and methicillin-resistant Staphylococcus aureus (MRSA), viruses, and fungi (including Candida). Surprisingly for an antimicrobial substance, there are also immune-stimulatory, anti-inflammatory, antioxidant, analgesic, and spasmolytic effects. Of the white blood cells, monocytes and macrophages are most affected, especially with increased phagocytic activity. Application by either vapor inhalation or oral route provides benefit for both purulent and non-purulent respiratory problems, such as bronchitis, asthma, and chronic obstructive pulmonary disease (COPD). There is a long history of folk usage with a good safety record. More recently, the biochemical details behind these effects have been clarified. Although other plant oils may be more microbiologically active, the safety of moderate doses of EO and its broad-spectrum antimicrobial action make it an attractive alternative to pharmaceuticals. EO has also been shown to offset the myelotoxicity of one chemotherapy agent. Whether this is a general attribute that does not decrease the benefit of chemotherapy remains to be determined. This article also provides instruction on how to assemble inexpensive devices for vapor inhalation.