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<i>Saussurea laniceps</i> (Compositae), commonly known as “cotton-headed snow lotus”, is the most effective “snow lotus” used in both Tibetan and Chinese folk medicine. It performs outstandingly in treating rheumatoid arthritis, which mainly is credited for its anti-inflammatory and anti-nociceptive efficacy, as explained by modern pharmacological studies. Extracts of the herb, including umbelliferone and scopoletin, exert such effects in various in vivo and in vitro studies. Besides the two chemicals above, more than 100 organic compounds have been found in <i>S. laniceps</i>, and 58 of them are presented here in molecular structure, including cynaropicrin, mokko lactone, apigenin, acacetin, and luteolin, all contributing to different bioactivities, such as analgesic, antioxidant, immunomodulatory, anti-microbial and anticancer effects. We provide a natural product library of <i>S. laniceps</i>, giving inspirations for structure modification and bioactivity-oriented screening, enabling sustainable use of this valuable plant. The ethnomedical applications and pharmacological discoveries are compared and crosslinked, revealing modern evidence for traditional usages. Despite that <i>S. laniceps</i> is a representative “snow lotus” herb, its material medica records and clinical applications are complicated; there is considerable confusion with the different snow lotuses in the academic community and on the market. This review also aims at clearing such confusion, and improving quality assessment and control of the herb. To better utilize the valuable plant, further comparison among the chemical constitutions, pharmacological activities and therapeutic mechanisms of different snow lotuses are needed.