Coconut oil as health oil was recognized in Ayurvedic medicine almost 4000 years ago. The same health effects were also attributed to the mother's milk in ancient literature. Modern research has now found a common link between these two natural health products - their lipid content. The medium chain fatty acids and monoglycerides found primarily in coconut oil have miraculous healing power which act as natural antibiotic and also help modulate immunity. The information discussed in this review explains that coconut oil, either topically applied or ingested, gets broken down to release Lauric Acid and Monolaurin - known anti-microbial agents. The studies reported in literature are discussed to evaluate the antiviral, antibacterial and antifungal benefits of coconut oil. Not only does coconut oil metabolites have antimicrobial activity but also these remarkable derivatives have been shown not to cause resistance organisms to appear. The anti-microbial mechanistic action also helps activate the antiinflammatory nature of the immune response in human body. In vitro, animal, and human studies support the potential of coconut oil as effective and safe immune-nutritive active. New and exciting health and industrial uses of coconut oil and its derivative are possible. Never before in recent times has the recognition of the positive health effects of coconut oil been stronger. And never before in the history of man is it so important to emphasize both need and efficacy of natural products known for their safety proposition. Immunity has been a buzzword in the current scenario and the demand for modulating immunity with natural means has been so unprecedented and so ubiquitous. Coconut oil and its value added forms can contribute to a more vigorous and healthy future.