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Baphicacanthus cusia (Nees) Bremek has a rich historical significance in China. Its stems and leaves have been used for traditional Chinese medicine or a dye called Qing-Dai in Chinese, while its roots are referred to as Nan-Ban-Lan-Gen in Chinese after processing. Both have been recognized and documented in the Chinese Pharmacopoeia. Modern pharmacological studies have revealed that B. cusia has numerous bioactive properties, such as antitumor, antiviral, anti-inflammatory, antioxidant, hepatoprotective, and neuroprotective properties. Moreover, B. cusia has been employed in clinical settings for its antitumor activity. The pivotal bioactive compounds in B. cusia are indirubin, indigo, and tryptanthrin. These potent substances and their derivatives demonstrate antitumor effects through inducing cell cycle arrest, triggering programmed cell death, inhibiting metastasis, and overcoming multidrug resistance. Nonetheless, the metabolic pathway of these compounds, particularly indole alkaloids, in B. cusia remains inadequately investigated. To increase the production of indole alkaloids such as indirubin and indigo, various biosynthetic approaches are employed. Consequently, this review discusses the bioactive compounds present in B. cusia, and elucidates their antitumor mechanisms, metabolism, and biosynthesis pathway. Existing studies indicate that B. cusia is a crucial medicinal plant harboring numerous biologically active substances, and its exploitation and application hold significant potential for substantial economic gains.