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Sandalwood is a commercially important aromatic tree, and is the source of fragrant heartwood and oil. Conventionally, new trees are raised through seeds and vegetative propagation has not been successful in this species. Multiplication of genetically superior trees using biotechnological approach would therefore be advantageous and the potential uses of plant biotechnology in forestry have been recognized. The major concern for the foresters is to conserve the existing genetic resources. Various tissue culture systems developed on sandalwood has been reviewed. Molecular markers are rapidly being developed in recent years for tree improvement and are increasingly used for diversity analysis, germplasm characterization and identification of core population. These biotechnological tools are useful in planning proper conservation strategies and also to carryout molecular breeding amongst the elite trees to produce superior clones. Further work required to be concentrated in the field of sandal biotechnology for tree improvement have also been outlined.