Plant proteinase inhibitor-II (PI-II) proteins are one of the promising defensive proteins that helped the plants to resist against different kinds of unfavorable conditions. Different roles for PI-II have been suggested such as regulation of endogenous proteases, modulation of plant growth and developmental processes and mediating stress responses. The basic knowledge on genetic and molecular diversity of these proteins has provided significant insight into their gene structure and evolutionary relationships in various members of this family. Phylogenetic comparisons of these family genes in different plants suggested that the high rate of retention of gene duplication and inhibitory domain multiplication may have resulted in the expansion and functional diversification of these proteins. Currently, a large number of transgenic plants expressing PI-II genes are being developed for enhancing the defensive capabilities against insects, bacteria and pathogenic fungi. Much emphasis is yet to be given to exploit this ever expanding repertoire of genes for improving abiotic stress resistance in transgenic crops. This review presents an overview about the current knowledge on PI-II family genes, their multifunctional role in plant defense and physiology with their potential applications in biotechnology.