Wormwood is an herb. The above-ground plant parts and oil are used for medicine. Wormwood is used for various digestion problems such as loss of appetite, upset stomach, gall bladder disease, and intestinal spasms.Wormwood is also used to treat fever, liver disease, and worm infections; to increase sexual desire; as a tonic; and to stimulate sweating.ormwood oil is also used for digestive disorders, to increase sexual desire, and to stimulate the imagination. Some people apply wormwood directly to the skin for healing wounds and insect bites. Wormwood oil is used as a counterirritant to reduce pain.