Smokeless tobacco consumption, which is widespread throughout the world, leads to oral submucous fibrosis (OSMF), which is a long-lasting and devastating condition of the oral cavity with the potential for malignancy. In this review, we mainly focus on the consumption of smokeless tobacco, such as paan and gutkha, and the role of these substances in the induction of OSMF and ultimately oral cancer. The list of articles to be examined was established using citation discovery tools provided by PubMed, Scopus, and Google Scholar. The continuous chewing of paan and swallowing of gutkha trigger progressive fibrosis in submucosal tissue. Generally, OSMF occurs due to multiple risk factors, especially smokeless tobacco and its components, such as betel quid, areca nuts, and slaked lime, which are used in paan and gutkha. The incidence of oral cancer is higher in women than in men in South Asian countries. Human oral epithelium cells experience carcinogenic and genotoxic effects from the slaked lime present in the betel quid, with or without areca nut. Products such as 3-(methylnitrosamino)-proprionitrile, nitrosamines, and nicotine initiate the production of reactive oxygen species in smokeless tobacco, eventually leading to fibroblast, DNA, and RNA damage with carcinogenic effects in the mouth of tobacco consumers. The metabolic activation of nitrosamine in tobacco by cytochrome P450 enzymes may lead to the formation of N-nitrosonornicotine, a major carcinogen, and micronuclei, which are an indicator of genotoxicity. These effects lead to further DNA damage and, eventually, oral cancer.