Formononetin, an isoflavone phytoestrogen widely present in legumes, has garnered significant attention for its diverse health-promoting functions, particularly its antioxidant, neuroprotective, and antihypertensive properties. However, the complex connection between these health benefits and its potent anti-inflammatory mechanisms remains largely unexplored. This comprehensive review, covering the period from 1994 to 2024, aims to bridge this gap by elucidating formononetin's potential as a therapeutic agent for a variety of inflammatory-mediated diseases, such as cancer, obesity, and neurodegenerative disorders. By interacting with key inflammatory signaling pathways (NF-kappa B, MAPK, JAK-STAT, PI3K-AKT, and TLRs) and through estrogen-dependent mechanisms, formononetin exerts strong anti-inflammatory effects that contribute to its overall health benefits. Our synthesis consolidates the latest findings, emphasizing the mechanisms underlying formononetin's anti-inflammatory actions and their implications for various pathological conditions. This review not only fosters a deeper understanding of formononetin's health-promoting potential but also encourages further research to harness its therapeutic benefits for enhancing human health.