Solanum pseudocapsicum L., known as the Jerusalem cherry or winter cherry, is a perennial underutilized shrub in the Solanaceae family. Despite its ornamental popularity, this plant has garnered significant scientific interest over recent decades due to its rich phytochemical profile and potential pharmacological applications. This review consolidates research findings predominantly from the past three decades to examine the nutritional composition, phytochemical constituents and pharmacological properties of S. pseudocapsicum. The plant contains significant levels of alkaloids, flavonoids, phenolics, saponins and glycosides. Preclinical studies (in vitro and in vivo models) suggest these contribute to antimicrobial, antioxidant, anti–inflammatory, anticancer and analgesic effects; however, the clinical evidence base for these activities remains limited. Crucially, the presence of toxic glycoalkaloids, particularly solanine and solamargine, necessitates cautious consideration of its therapeutic applications. This review also covers toxicological aspects, traditional uses and future research directions, highlighting the imperative to balance therapeutic potential with safety concerns. It provides insights into the potential of S. pseudocapsicum as a source of bioactive compounds for nutraceutical development, while emphasizing the need for further research, including rigorous toxicological evaluation and clinical studies, to establish standardized protocols for safe utilization.