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Andrographis paniculata, a traditional medicinal plant, is widely used to treat various disorders. According to traditional Chinese medicine (TCM) theory, it is intensely bitter in taste and cold-natured. Andrographolide and its derivates are the major bioactive compounds that show anti-inflammatory, anti-tumor, anti-diabetes, cardiovascular protection, neuroprotective, and hepatoprotective effects. In this review, we will focus on the application of TCM prescriptions and the modern bioactivities of Andrographis Herba. Due to the low content of andrographolide and derived lactones in the original species and the complexity of chemical structure, there is an urgent need to develop biotechnological methods for obtaining andrographolide and its derivatives sustainably. Nevertheless, the andrographolide biosynthetic pathway still needs to be fully elucidated in A. paniculata. Therefore, we further review recent progress in revealing the andrographolide biosynthetic pathway, combined with heterologous synthesis strategies of other plant diterpenoids to help create a cell factory with higher production of andrographolide in the future.