The olive (Olea europaea L.) is a widely-distributed plant that originated in the Mediterranean region. Its fruit is commonly used to produce olive oil, table olives, and other by-products. The main nutrient of the olive fruit is fat, predominantly monounsaturated fatty acids (MUFA). Olives are also rich in carbohydrates, vitamins, and minerals. Increasing numbers of investigations show that the health benefits of the 'Mediterranean diet' are associated with lower incidences of chronic degenerative diseases and higher life expectancy. These benefits have been attributed to the dietary consumption of olive oil. Furthermore, epidemiological data suggest that phenolic components and other antioxidants in olive oil are responsible for some of these benefits. Remarkably, these minor components play significant roles in reducing the incidences of atherosclerosis, cardiovascular disease, neurodegenerative diseases, and certain types of cancer. We reviewed the main olive products and the nutritional composition of olive oil focusing on fatty acids, phenolic compounds, and other antioxidants. We also discuss the chief chemical constituents relevant to the biological activity of olive oil, the metabolism and bioavailability of olive oil phenolic compounds, and the antioxidant activity of metabolites. Finally, we outline recent advances, potential applications, and limitations of developments in the olive oil industry, aiming to provide a theoretical basis for further research and to broaden the prospect of its application to healthy diets.