For the first time, the chemical composition of essential oils obtained from the leaves and flowers of Mediterranean rosemary (Salvia rosmarinus) collected in forested areas surrounding Jerusalem has been investigated. Gas chromatographic analysis revealed that the essential oils are dominated by structurally unusual terpenoids containing a cyclobutane ring. A comprehensive survey of the literature further demonstrates that S. rosmarinus is a prolific natural source of cyclobutane-containing terpenes, with approximately 40 such compounds reported to date. These rare terpenoid frameworks are of particular interest due to their uncommon ring strain and distinct biosynthetic origin. In addition, available data on the biological activities of the major cyclobutane-containing terpenes are summarized, highlighting their antimicrobial, anti-inflammatory, antioxidant, and cytotoxic properties. Collectively, these findings underscore rosemary as a unique producer of cyclobutane terpenoids and emphasize the pharmacological potential of this rare class of natural products.