Star fruit (Averrhoa carambola), a popular fruit in many parts of the world, is considered to have many beneficial nutritional and medicinal effects. However, harmful nephrotoxic and neurotoxic effects have also been described. In this review, we have discussed the reported beneficial effects of star fruit, explored the potential mechanisms for such beneficial effects, and outline factors that may affect the safe level of consumption. The beneficial effects include the following: antioxidant (mediated via L-ascorbic acid, epicatechin, and gallic acid), hypoglycemic (mediated via high fiber levels and 2-dodecyl-6-methoxycyclohexa-2,5-diene-1,4-dione), hypotensive (mediated via apigenin), hypocholesterolemic (mediated via micronized fiber), anti-inflammatory, anti-infective, antitumor effects, and immune-boosting effects. The presence of chronic kidney disease, gastroenteropathies, chronic pancreatitis, dehydration, consumption on an empty stomach, and higher concentration of oxalate in fruit/juice consumed predisposes to toxicity. The level of ingestion at which the beneficial effects transition to nephrotoxicity and neurotoxicity is still to be accurately ascertained. Furthermore, the relationship between the amount of star fruit ingested and the severity of toxicity is not certain and warrants further study.