Pseudotrachydium kotschyi is a native medicinal plant used as a local medicine from Lorestan province of western Iran having numerous biological properties. After GC−MS analysis of Pseudotrachydium kotschyi essential oils (PKEOs), some biological activities were investigated. Additionally, TNF-α and TGF-β1 were studied in Leishmania-infected macrophages (in vitro) and Carrageenan-induced paw edema in rats. Finally, anti-inflammatory and wound-healing potential of PKEOs were investigated in vivo in mice. Total components identified by GC−MS contained 53 molecules, among which Z-α-trans-Bergamotol (23.25%), Durylaldehyde (16.07%), and α-Bergamotene (10.48%) existed in the highest amount in PKEOs. Antimicrobial assay of PKEOs showed maximum growth inhibition against Listeria monocytogenes and Kluyveromyces marxianus at the dose of 625 μg/ml. PKEOs exhibited a high cytotoxicity on lung cancer cell line A549 at a dose of 4 mg/ml. Anti-Leishmania activity of PKEOs showed concentration of 5000 µg/ml that had similar potency of glucantime at 125 µg/ml. The highest anti-inflammatory effect of PKEOs for Carrageenan-induced paw edema was observed at 100 concentrations, with paw inflammation reduced by 83.70% after using PKEO ointment. The present study reports broad-spectrum biological functions for essential oil from P. kotschyi. However, these biological activities, including anti-proliferative, anti-Leishmania, anti-inflammatory, antimicrobial and wound-healing potential, were not studied in detail. Therefore, it may be attractive for investigating the detailed mechanistic and molecular aspects of biological activities of PKEOs. Considering that the present study is the first to report the biological activity of P. kotschyi, further studies on their metabolites are needed to replicate the present findings.