The administration of essential oils or their constituents in aromatherapy, complementary medicine, and folk medicine has been known for a long time, and its relevance is steadily growing. In the last few years, many scientific studies were conducted to investigate the effect and the mechanisms of action of these compounds on the central nervous system. The aim of this article is to summarize the literature on this topic published in the period 2008–2010, upgrading a comprehensive review. The major actions discussed are pain, anxiety, learning, memory, attention, arousal, relaxation, sedation and sleep. Furthermore, the effects on mood, behaviour and perception as well as the application of essential oils in the treatment of epilepsy, stress, dementia and Alzheimer's disease are discussed. Copyright © 2011 John Wiley & Sons, Ltd.