Background: Payasa (also referred to as Paramanna or Kshaireyi) is a premier milk-based preparation within Kritanna Kalpana (Ayurvedic dietetics). While commonly perceived as a traditional sweet, classical texts describe it as a potent therapeutic vehicle with diverse clinical applications ranging from nutritional support to the management of neurological and psychiatric disorders. Objective: This study aims to systematically review and document the various preparation methods, pharmacological properties, therapeutic indications, and dietary guidelines of Payasa as described in the Brihatrayi, Laghutrayi, and various Nighantus. Methods: A comprehensive literary search was conducted across classical Ayurvedic scriptures, including Sushruta Samhita, Bhavaprakasha, Kshema Kutuhala, Yogaratnakara, and Nighantus such as Kaiyadeva, Shodala, and Madanapala. Data regarding ingredients, processing techniques (Samskara), and clinical indications were extracted and categorized. Results: The review identified that while the base of Payasa is inherently Guru (heavy) and Brimhana (nourishing), its properties are significantly altered by specific ingredients. Notable variations include Eranda Phala Payasa for Gridhrasi (sciatica), Shatavari Payasa for ocular health (Timira), and Swethonmatta Payasa for Unmada (insanity). The study also highlights critical safety protocols, including the mandatory use of Sheeta Udaka (cold water) as Anupana to prevent Vidaha (burning sensation) and the contraindication of Payasa in Prameha (diabetes) and Vrana (wounds). Conclusion: Payasa represents a sophisticated integration of nutrition and therapeutics in Ayurveda. Understanding its specific formulations and contraindications is essential for Swasthavritta practitioners to utilize it effectively in lifestyle management and disease prevention. Further clinical research is warranted to validate the efficacy of specialized therapeutic Payasa preparations in contemporary medical practice.