Liquorice has long been used in pharmacy as a flavouring agent, demulcent and mild expectorant. Many of the early claims for a broad spectrum of uses of the drugs are borne out by modern pharmacological research. Glycyrrhizin is reported to be 50–150 times sweeter than sucrose. Corticosteroid-like activity has been recognized with liquorice extracts displaying mild anti-inflammatory and mineralocorticoid activities. These have been exploited in the treatment of rheumatoid arthritis, Addison’s disease and various inflammatory conditions. Glycrrhhetenic acid is implicated for these activities and it has been found to inhibit enzymes that catalyse the conversion of prostaglandins and glucocorticoids into inactive metabolites. This results in increased levels of prostaglandins, e.g., PGE₂ and PGF_2α and hydrocortisone. Flavonoid component of the root also exerts spasmolytic and anti-ulcerogenic activity. The most significant current application is to give symptomatic relief from peptic ulcers by promoting healing through increased prostaglandin activity. A semi-synthetic derivative of glycyrrhetenic acid, the hemisuccinate carbenoxolone sodium is now widely prescribed for the treatment of gastric and duodenal ulcers. The mineralocorticoid effects (sodium and water retention) may exacerbate hypertension and cardiac problems.

In Indian medicine, liquorice was one of the prominent drugs of Ayurveda mentioned by Sushruta in his treatise. Called yastimadhu (Sanskrit), mulethi (Hindi) or athimaduram (Tamil), it is a component of several traditional medicinal formulations.