German chamomile galenic preparations are used to treat mild skin diseases, inflammation and spasms, and they have also reported to have anxiolytic and sedative effects. The medicinal use of chamomile is well-known in ethnomedicine. Since chamomile has shown to have some adverse effects, there is a need to develop new formulations, such as dry extracts, for the present herb. The aims of this study were (1) to develop a novel method for preparing essential oils and dry extracts from German chamomile flowers, (2) to reveal the phytochemical composition of such extracts, and (3) to verify the analgesic and soporific activity of extracts in vivo with a rodent animal model. Furthermore, our study aims to gain knowledge of the ethnomedical status of chamomile in the past and presence. Essential oils and dry extracts were successfully prepared from the tincture and aqueous extracts obtained after hydrodistillation and from a tincture powder. Total 22 phenolic compounds (7 hydroxycinnamic acids, 13 flavonoids and 2 phenolic acids), were found in the dry extracts by using UPLC-MS/MS. Total 9 main terpenoids were identified in the chamomile oil, and these terpenoids represent the chemotype rich in bisabolol oxides A and B. In the highest yield, the ratio of phenolic compounds and extract was in the range of 1:14-1:16 and triple extraction was performed. In in-vivo studies with mice and rats, the extracts showed analgesic activity and improvements in sleep. The highest sedative effect in rodents was found with the extract prepared by using a 70% aqueous ethanol solution for extraction. The administration of such extract at the dose of 50 mg/kg significantly prolonged the sleeping time in rats.