Traditional medicine has been practiced in Sri Lanka for 3,000 years. At present, there are four systems of traditional medical systems in Sri Lanka viz. Ayurveda, Siddha, Unani and Deshiya Chikitsa (Sri Lankan traditional treatment). The most important among them is Ayurveda, which also forms part of the national health services provided by the government of Sri Lanka including separate ministry for Indigenous Medicine. At present, Ayurveda serves a large proportion of the population with one Ayurvedic physician per 3,000 people in Sri Lanka. About 60 to 70% of the rural population relies on traditional and natural medicine for their primary health care. Therefore Herbal drugs are essential components of traditional medical system in Sri Lanka. Sri Lanka is identified as one of the most biologically diverse countries in Asia with about 20% of the area under forest. It has the highest species diversity per unit area in Asia and is one of the mega biodiversity hot spots. Therefore it is an urgent need to rationally utilize medicinal plants for curative purposes with proper maintenance of biodiversity. The government of Sri Lana has taken several initiatives to develop technology for the effective conservation and efficient utilization of medicinal plants, to coordinate research and developmental activities through the Department of Ayurveda, Bandaranayake Memorial Ayurvedic Research Institute and the Institute of Indigenous Medicine –University of Colombo. But lack of funding and some problems and constraints knowledge of herbal medical systems and its applications to cure illnesses has not been effectively explored fully by Sri Lanka. If this happens successfully, Sri Lanka could gain a very significant competitive edge in the global market, especially in the herbal medical drugs, beauty care and nutraceuticals. There is a lot of scope for Sri Lanka to achieve higher rank in global market through export of quality products from medicinal and aromatic plants. But Sri Lanka seems to be lagging behind using advanced technology and standardization procedures in herbal products and is ranked lower in the herbal medicine global market share, while China occupies nearly 30% of the global market with high tech issues. Therefore Sri Lanka need to be focused on the quality assurance with multidisciplinary researches with in the country and collaborative works with other high tech used countries. Further Good laboratory practices (GLP) and Good manufacturing practices (GMPs) are also needed to apply for produce good quality medicinal products in Sri Lanka. Without overcoming these entire measures current scenario is not sufficient to increase the global market share of a herbal drug industry and herbal medical practice for Sri Lanka. This presentation provides information on Sri Lanka herbal medicine, medicinal and aromatic plant resources, research and development activities including drug standardization, trade and marketing, problems and constraints, future developments and collaborative activities with other countries.