Plants emit a number of volatile organic compounds some of which are very attractive for perfume and cosmetic industry which reached about 11.6 billion US dollars in the global market in 2003. To date, about 17,000 plant volatile compounds have been identified. In the last two decades efforts have been made to understand the biosynthesis, functions and regulation of emission of plant volatiles and to target certain volatiles for exploitation at the commercial level. Work is still undergoing in several laboratories in this field by using the most advanced molecular techniques. Plant volatiles are mostly derived from three main classes of compounds: terpenoids, phenyl propanoids/ benzenoids and fatty acid derivatives. This review deals with the function and regulation of plant volatiles highlighting the application of new biotechnological approaches to improve the aroma and scent of flowers and fruits with high commercial value.