More than a hundred terpenoids are known from different parts of the neem plant. Of its biological constituents, the most active and well studied compound is Azadirachtin. However, in most traditional preparations of neem as pesticide or medicine a mixture of neem chemicals are present and provide the active principles. The neem terpenoids are present in all parts of the plant, in the living tissues. Recently, the site of synthesis and accumulation of the neem chemicals has been identified as secretory cells.
Secretory cells are most abundant in the seed kernels.
The secretory cells can be seen with iodine solution. Besides the terpenoids, neem also contains more than 20 sulphurous compounds responsible for the characteristic smell of crushed seeds and neem oil. In toxicological studies carried out in the USA and Germany, different neem product were neither mutagenous nor cancerogenic, and they did not produce any skin irritations or organic alterations to mice and rates even at high concentrations. In another Canadian study, Neem was found to be harmless to Aquatic invertebrates and other non-target species. It is suited for mixing with other synthetic pesticides and in fact enhances their action.