Plants of the genus Retama (Fabaceae) are used in traditional medicine of the Mediterranean Basin as an emetic, purgative, and vermifuge. Certain Retama species are also employed to treat a multitude of disorders, including diabetes, hepatitis, jaundice, sore throat, skin diseases, joint pain, rheumatism, fever, and inflammation. This review deals with updated information on the distribution, botanical characteristics, ethnopharmacology, phytochemistry, pharmacological activities, and toxicity of the Retama species in order to support their therapeutic potential and to provide an input for future research prospects. The Retama species are mainly employed as ethnomedicinal remedies in Mediterranean countries, including Algeria, Egypt, Italy, Lebanon, Libya, Morocco, and Spain. Previous phytochemical studies show a complex composition, rich in carbohydrates (galactomannans), polyols (pinitol), fatty acids, phenolic compounds (genistein, daidzein) and alkaloids (retamine, lupanine). The pharmacological activity of their various extracts has been widely studied, revealing, among others, the anti-microbial, anti-inflammatory, and anti-diabetic effects of these species. The potential toxicity of these medicinal plants has also been discussed. Although recent experimental evidence confirms the pharmacological interest of this genus, further studies are necessary.