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Cedarwood oil is used for potential health and beauty benefits. Cedarwood is one of several essential oils that may improve hair growth. It is beneficial for skin conditions like acne and reduce the appearance of scars, treat minor wounds and can bring down pain, swelling, and inflammation. When used as an aromatherapy treatment, its aroma releases soothing effects on mood and making it beneficial for reducing stress and healthy sleep. A compound called cedrol, found in some cedarwood oils also repels mosquitoes, ticks and stops moths from eating clothes.