
Medicinal Uses and Indications
Although professional herbalists and aromatherapists use lavender to treat a variety of conditions (described later), clinical studies thus far have only demonstrated benefit for insomnia and alopecia (hair loss).
Insomnia
In folklore, pillows were filled with lavender flowers to help the restless fall sleep. There is now scientific evidence to suggest that aromatherapy with lavender slows the activity of the nervous system, improves sleep quality, promotes relaxation, and lifts mood in people suffering from sleep disorders. Studies also suggest that massage with essential oils, particularly lavender, may result in improved sleep quality, more stable mood, increased mental capacity, and reduced anxiety. In one recent study, participants who received massage with lavender felt less anxious and more positive than participants who received massage alone. Lavender flowers have also been approved by the Commission E in Germany as a tea for insomnia, restlessness, and nervous stomach irritations.
Alopecia areata
In one study of 86 people with alopecia areata (a disease of unknown cause characterized by significant hair loss, generally in patches), those who massaged their scalps with lavender and other essential oils daily for 7 months experienced significant hair re-growth compared to those who massaged their scalps without the essential oils. It is not entirely clear from this study whether lavender (or a combination of lavender and other essential oils) was responsible for the beneficial effects.
Other
Aromatherapists also use lavender as a tonic in inhalation therapy to treat headaches, nervous disorders, and exhaustion. Herbalists treat skin ailments, such as fungal infections (like candidiasis), wounds, eczema, and acne, with lavender oil. It is also used externally in a healing bath for circulatory disorders and as a rub for rheumatic ailments (conditions affecting the muscles and joints). One study evaluating essential oils, including lavender, for treating children with eczema concluded that the oils added no benefit to therapeutic touch from the mother; in other words massage with and without essential oils was equally effective in improving the dry, scaly skin lesion.
source from
http://www.umm.edu