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Carnosine (β-alanyl-l-histidine) was discovered in 1900 as an abundant non-protein nitrogen-containing compound of meat. The dipeptide is not only found in skeletal muscle, but also in other excitable tissues. Most animals, except humans, also possess a methylated variant of carnosine, either anserine or ophidine/balenine, collectively called the histidine-containing dipeptides. This review aims to decipher the physiological roles of carnosine, based on its biochemical properties. The latter include pH-buffering, metal-ion chelation, and antioxidant capacity as well as the capacity to protect against formation of advanced glycation and lipoxidation end-products. For these reasons, the therapeutic potential of carnosine supplementation has been tested in numerous diseases in which ischemic or oxidative stress are involved. For several pathologies, such as diabetes and its complications, ocular disease, aging, and neurological disorders, promising preclinical and clinical results have been obtained. Also the pathophysiological relevance of serum carnosinase, the enzyme actively degrading carnosine into l-histidine and β-alanine, is discussed. The carnosine system has evolved as a pluripotent solution to a number of homeostatic challenges. l-Histidine, and more specifically its imidazole moiety, appears to be the prime bioactive component, whereas β-alanine is mainly regulating the synthesis of the dipeptide. This paper summarizes a century of scientific exploration on the (patho)physiological role of carnosine and related compounds. However, far more experiments in the fields of physiology and related disciplines (biology, pharmacology, genetics, molecular biology, etc.) are required to gain a full understanding of the function and applications of this intriguing molecule.