Theaflavin is a general name for a class of compounds with a benzodiazepine structure formed by the condensation of catechins, which is catalyzed by polyphenol oxidase, during the processing of black tea. Theaflavins are the determinant of the quality of black tea and have been reported to have a variety of biological functions. Theaflavins are called the “soft gold of tea” and have great potential and promising applications in the fields of foods, health products and natural medicine. Theaflavins are sought after by the consumer market because of their various special biological activities, which have attracted the growing interest of researchers in recent years. Numerous studies have shown that theaflavin has a variety of biological activities such as hypolipidemic, anti-tumor, blood glucose regulatory, and anti-aging activities. Their mechanism of action involves a wide range of signaling pathways, including nuclear factor kappa-B (NF-κB), phosphatidylinositol-3-kinase/protein kinase B (PI3K/Akt), and activating protein-1 (AP-1) signaling pathways, with multi-target, multi-link, multi-effect characteristics. However, the mechanism of action of theaflavins has not yet been clearly investigated due to the inaccessibility of high-purity theaflavins and theaflavin monomers, and the unstable nature and low bioavailability of theaflavins. Therefore, this paper outlines the latest progress in understanding the various biological activities of theaflavins, with the aim of providing a reference for the research and development of natural dietary supplements and functional foods using theaflavins as raw material.