Tea, made from leaves of the plant Camellia sinensis, Theaceae, has been used by humans for thousands of years, first as a medicinal herb and then as a beverage that is consumed widely. For the past 25 years, tea has been studied extensively for its beneficial health effects, including prevention of cancer, reduction of body weight, alleviation of metabolic syndrome, prevention of cardiovascular diseases, and protection against neurodegenerative diseases. Whether these effects can be produced by tea at the levels commonly consumed by humans is an open question. This review examines these topics and elucidates the common mechanisms for these beneficial health effects. It also discusses other health effects and possible side effects of tea consumption. This article provides a critical assessment of the health effects of tea consumption and suggests new directions for research in this area.