Cosmeceuticals are topically applied cosmetic products containing a biologically active ingredient with a pharmaceutical effect that improves, nourishes, and treats the skin appearance. The trend of cosmeceuticals began during the mid-20th century due to its potent ingredients with therapeutic effects for various skin ailments. Even though there is a great advancement in cosmetics, which shows the risk of cosmetic linked melanoma, endocrine disorders, and birth defects which was one in 1500 people during 1935 have increased to one in 75 people in 2000. Hence, as a part of reducing the harmful effect, natural ingredients were added to the formulation to give the pharmaceutical effect. Thus, natural/herbal cosmeceuticals were introduced. Due to the awareness of the side effects such as photo-toxicity, mutagenicity, irritation by these synthetic products, people started preferring herbal/natural cosmetic products. Moreover, natural cosmeceuticals were proven to be effective against various dermatological conditions as well as have fewer side effects marked the natural/herbal cosmeceuticals in the market. Unlike a drug, cosmeceutical products undergo safety, toxicity, and efficacy tests, but these are not classified under Food and Drug Administration. This review will give an insight into different natural ingredients used in natural/herbal cosmeceutical formulation and their function challenges faced during formulation, advantages of natural cosmeceuticals over regular cosmeceuticals, and regulatory aspects in India.