Extracting natural active ingredients from plants is an effective way to develop and screen modern drugs. Psoralea corylifolia (PC) is a leguminous plant whose seeds have long been used as a Traditional Chinese Medicine to treat psoriasis, rheumatism, dermatitis, and other diseases. To date, several main compounds, including coumarins, flavonoids, monoterpene phenols, and benzofurans, have been identified from the seeds of PC. Among them, bavachinin is a type of flavonoid with various biological activities. In this article, the biological activities and mechanisms of action of bavachinin and its derivatives are reviewed. It includes the pharmacokinetic characteristics of bavachinin and its derivatives, as well as its prominent anti-inflammatory, antitumor, antibacterial, and antiviral pharmacological activities and related metabolic studies. Bavachinin displayed these activities through different receptors, such as peroxisome proliferator-activated receptors (PPARs), as well as multiple signaling pathways and enzyme systems. In summary, bavachinin and its derivatives have potential drug development value in many fields, such as anti-inflammatory, antitumor, nervous system disease, and diabetes. We believe that this review will lay a foundation for bavachinin-based drug development throughout the world.