Ephedra-containing dietary supplements have been linked to a high rate of serious side effects and a number of deaths, leading to concern from the U.S. Food and Drug Administration (FDA), the National Center for Complementary and Alternative Medicine, and the medical community. However, initial efforts to test and regulate ephedra were defeated by lobbying and political pressure from the dietary supplement industry. Ultimately, in response to accumulating evidence of adverse effects and deaths related to ephedra, the FDA banned the sale of ephedra-containing supplements on April 12, 2004.

Following a legal challenge by an ephedra manufacturer, the U.S. Court of Appeals for the Tenth Circuit upheld the FDA's ban of ephedra in 2006. The sale of ephedra-containing dietary supplements remains illegal in the United States due to evidence of adverse ephedra-related effects. Following the FDA's ban, the supplement industry has marketed "ephedrine-free" or "legal" ephedra products, in which the ephedra is replaced with other herbal stimulants such as bitter orange.

The alkaloids ephedrine and pseudoephedrine are the active constituents of the plant. Pseudoephedrine is used in over-the-counter decongestants. Derivatives of ephedrine are used to treat low blood pressure, but alternatives with reduced cardiovascular risk have replaced it for treating asthma. Ephedrine is also considered a performance-enhancing drug and is prohibited in most competitive sports. Some species in the Ephedra genus have no alkaloid content; however, the most commonly used species, E. sinica, has a total alkaloid content of 1–3% by dry weight. Ephedrine constitutes 40–90% of the alkaloid content, with the remainder consisting of pseudoephedrine and the demethylated forms of each compound.

Ephedra is both a stimulant and a thermogenic; its biological effects are due to its ephedrine and pseudoephedrine content. These compounds stimulate the brain, increase heart rate, constrict blood vessels (increasing blood pressure), and expand bronchial tubes (making breathing easier). Their thermogenic properties cause an increase in metabolism, evidenced by an increase in body heat.

In traditional Chinese herbology, E. sinica is included in many herbal formulas used to treat cold and flu such as 麻黃湯 ma huang tang (ephedra decoction) or 麻杏石甘湯 ma xing shi gan tang (ephedra, apricot kernel, gypsum, and licorice decoction). Ephedra is used therapeutically as a diaphoretic to help expel exterior pathogens and regulate the proper functioning of the lungs.

Ephedra is widely used by athletes, despite a lack of evidence that it enhances athletic performance. Ephedra may also be used as a precursor in the illicit manufacture of methamphetamine.

Ephedra has also been used for weight loss, sometimes in combination with aspirin and caffeine (known as an ECA stack). Some studies have shown that ephedra, when taken in a regulated and supervised environment, is effective for marginal short-term weight loss (0.9 kg/month more than the placebo), although it is unclear whether such weight loss is maintained. However, several reports have documented the large number of adverse events attributable to unregulated ephedra supplements.

Side effects of ephedra may include severe skin reactions, hypertension, irritability, nervousness, dizziness, trembling, headache, insomnia, profuse perspiration, dehydration, itchy scalp and skin, vomiting, hyperthermia, irregular heartbeat, seizures, heart attack, stroke, or death.

There are no formal requirements for standardization or quality control of dietary supplements in the United States, and the dosage of effective ingredients in supplements may vary widely from brand to brand or batch to batch. Studies of ephedra supplements have found significant discrepancies between the labeled dose and the actual amount of ephedra in the product. Significant variation in ephedrine alkaloid levels, by as much as 10-fold, was seen even from lot to lot within the same brand.

Escalating concerns regarding the safety of ephedra supplements led the FDA to ban the sale of ephedra-containing supplements in the United States in 2004. This ban was challenged by supplement manufacturers and initially overturned, but ultimately upheld.