Ghee is recognized as an important food product in Indian diet due its high nutritive values, pleasant aroma, taste and unique texture. India produces 900,000 tonnes of marketed ghee with a value of 85, 000 million. In tropical country like India spoilage of ghee is mainly due to oxidative rancidity. Ghee is manufactured by different method namely, desi methods, direct creamery method, creamery butter method, pre-stratification method and continuous method. Each method certainly pertains to quality and flavor imparting strategy in ghee. Several innovations are endeavored to increase fat concentration and reduction of fat loss during manufacturing process and high temperature heat treatment of ghee has significantly improved the overall quality of ghee. In this review, we have discussed the physiochemical properties, and effect of natural antioxidant and free fatty acid on thermal oxidation and storage of ghee. In addition, we have discussed the biological importance ghee.