Xylaria is a large and the first described genus of the family Xylariaceae and reported to be promising and significant natural source of bioactive compounds. Bioactive novel natural compounds discovery and invention is a multidisciplinary endeavor that includes the search for new potent pharmaceuticals. Xylaria produce enormous diversified bioactive compounds with anticancer, antioxidant, antimicrobial, immune-stimulatory as a secondary metabolite via natural fruiting bodies as well as fermentation process and can be inexhaustible and sustainable resource. Researchers reported so far Xylaria as macro fungi as well as endophytic forms natural ware houses of biologically active compounds. Recent research and development technologies has opened new avenue on fungal research for highly sustainable and economically feasible novel natural products which are the frontiers of new drug invention. In this present review, we compiled the detailed reports of diverse class of novel secondary metabolites produced by the fungal species of Xylaria of its pharmaceutical importance.