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The oleogum resins of Boswellia species known as frankincense have been used for ages in traditional medicine in India, China and the Arabian world independent of its use for cultural and religious rituals in Europe. During the past two decades, scientific investigations provided mounting evidence for the therapeutic potential of frankincense. We conducted a systematic review on the anti-inflammatory and anti-cancer activities of Boswellia species and their chemical ingredients (e.g. 3-O-acetyl-11-keto-β boswellic acid, α- and β-boswellic acids, 11-keto-β-boswellic acid and other boswellic acids, lupeolic acids, incensole, cembrenes, triterpenediol, tirucallic acids, and olibanumols). Frankincense acts by multiple mechanisms, e.g. by the inhibition of leukotriene synthesis, of cyclooxygenase 1/2 and 5-lipoxygenase, of oxidative stress, and by regulation of immune cells from the innate and acquired immune systems. Furthermore, frankincense modulates signaling transduction responsible for cell cycle arrest and inhibition of proliferation, angiogenesis, invasion and metastasis. Clinical trials showed the efficacy of frankincense and its phytochemicals against osteoarthritis, multiple sclerosis, asthma, psoriasis and erythematous eczema, plaque-induced gingivitis and pain. Frankincense revealed beneficial effects towards brain tumor-related edema, but did not reduce glioma size. Even if there is no treatment effect on brain tumors itself, the management of glioma-associated edema may represent a desirable improvement. The therapeutic potential against other tumor types is still speculative. Experimental toxicology and clinical trials revealed only mild adverse side effects. More randomized clinical trials are required to estimate the full clinical potential of frankincense for cancer therapy.