Sandalwood oil is an essential oil obtained from the steam distillation of chips and billets cut from the heartwood of various species of sandalwood trees, mainly Santalum album (Indian sandalwood) and Santalum spicatum (Australian sandalwood).

Sandalwood oil is used in perfumes, cosmetics, sacred unguents, and as a mild food flavouring.

Due to its highly coveted fragrance, the essential oil produced from sandalwood is often used in aromatherapy, and is also added to soaps and cosmetics. It is used in Ayurvedic medicine for the treatment of both somatic and mental disorders, including common colds, bronchitis, fever, urinary tract infections, and inflammation.A study investigating the effects of inhalation of East Indian sandalwood oil and its main compound, α-santalol, on human physiological parameters found that the compounds elevated pulse rate, skin conductance, and systolic blood pressure.

There is also religious significance associated with sandalwood oil and it is used in many different religions around the world, including Hinduism, Jainism, Buddhism, and Zoroastrianism.