An essential oil is a concentrated, hydrophobic liquid containing volatile aromatic compounds from plants. It is produced by distillation. Other extraction processes to obtain aromatic plant compounds include expression, or solvent extraction. Essential oils are used in perfumery, aromatherapy, cosmetics, incense, for flavoring food and drink, and to a lesser extent, in medicine and household cleaning products. They are valuable commodities to the fragrance and flavorant industries.

Essential oil is also known as volatile oil and ethereal oil. It may also be referred to as "oil of" the raw plant material from which it was extracted, such as oil of clove. The term essential is intended to indicate that the oil is the fragrant essence of the plant from which it is extracted and not in the more common grammatical sense of being indispensable. It is not to be confused with essential fatty acids.

The medical use of vegetable oils has a long and distinguished history. Many oils that are used medicinally are essential oils, which are distilled rather than pressed or otherwise extracted. Medical properties claimed by those who sell medicinal oils vary from skin treatments to remedies for cancer, and are often based on historical use of these oils for these purposes. Such claims are now subject to regulation in most countries, and have grown correspondingly more vague, to stay within these regulations. Interest in such uses of essential oils has enjoyed a revival in recent decades, with the popularity of aromatherapy, in which oils are heated and volatilized.

In many countries essential oils are included in the national pharmacopeia, but up to the present moment aromatherapy as science has never been recognized as a valid branch of medicine in the United States, Russia, Germany, or Japan.

Essential oils, phytoncides and other natural VOCs work in different ways. At the scent level they activate the limbic system and emotional centers of the brain. When applied to the skin (commonly in form of "massage oils" i.e. 1-10% solutions of EO in carrier oil) they activate thermal receptors, and kill microbes and fungi. Internal application of essential oil preparations (mainly in pharmacological drugs; generally not recommended for home use apart from dilution - 1-5% in fats or mineral oils, or hydrosoles) may stimulate the immune system.

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