The genus Potentilla is a member of the family Rosaceae, subfamily Rosoideae, which is mainly distributed in temperate, arctic and Alpine zones of the Northern hemisphere. This genus has been known since ancient times for its curative properties. Extracts of the aerial and/or underground parts have been applied in traditional medicine for the treatment of inflammations, wounds, certain forms of cancer, infections due to bacteria, fungi and viruses, diarrhoea, diabetes mellitus and other ailments. This comprehensive review provides a botanical description of Potentilla species and their phytochemical constituents in the aerial and underground parts. In vitro and in vivo pharmacological studies are reviewed and discussed, focussing on antidiarrhoic, anti-ulcerogenic, anti-neoplastic, antiviral and antimicrobial, antihyperglycemic, anti-inflammatory, spasmolytic, hepatoprotective and antioxidative activities of Potentilla species. Most of the pharmacological effects can be explained by the high amount of tannins and to a lesser extent by triterpenes, present in all plant parts. However, future efforts should concentrate more on in vitro and in vivo studies and also on clinical trials in order to confirm traditional wisdom in the light of a rational phytotherapy. Especially the efficacy of Potentilla erecta rhizome extracts in the treatment of colitis ulcerosa and of viral infections should be further substantiated in clinical studies.