Sanguinarine is a quaternary ammonium benzophenanthine alkaloid found in traditional herbs such as Chelidonium, Corydalis, Sanguinarum, and Borovula. It has been proven to possess broad-spectrum biological activities, such as antitumor, anti-inflammatory, antiosteoporosis, neuroprotective, and antipathogenic microorganism activities. In this paper, recent progress on the biological activity and mechanism of action of sanguinarine and its derivatives over the past ten years is reviewed. The results showed that the biological activities of hematarginine and its derivatives are related mainly to the JAK/STAT, PI3K/Akt/mTOR, NF-κB, TGF-β, MAPK and Wnt/β-catenin signaling pathways. The limitations of using sanguinarine in clinical application are also discussed, and the research prospects of this subject are outlined. In general, sanguinarine, a natural medicine, has many pharmacological effects, but its toxicity and safety in clinical application still need to be further studied. This review provides useful information for the development of sanguinarine-based bioactive agents.