Alchemy, along with magic, is an essential part of Exile gaming, as during some of the more difficult quests your party will need a lot of healing. Luckily your party can learn the skill of alchemy, and take potentially life-saving potions into battle. Here is a list of all the ingredients you need for alchemy:

Holly - As you leave Fort Emergence go east until you reach a river. Cross this (with the spell of flight or the Orb of Thralni) and land on the island where there is a bush of it growing.
Mandrake Root - Go to the port town of Libras (in south Karnold province), buy some tickets and take the ferry to Lost Isle. Leave the town and go south on the ferries provided by the local fishermen. On the southernmost island there is an encounter which is where you will find some mandrake root.
Holly and Comrey Root - Follow the road east out of Lorelei and take the south fork when the road diverges. An encounter takes you to an alchemy shop.
Ember Flowers - Go south from Spineridge (south Monoroe province) and follow the left/west hand side of the mountains closely until the range is interrupted by a lake. Next to this lies a patch of ember flowers.
Wormgrass - Go as far north east in Valorim as you can and search the mountains. In a small valley is a patch of wormgrass.
More Mandrake Root - Over the mountains, to the west of the Wormgrass, in the cavern marked 'land of the guild', is a guarded tunnel. At the end of this is some Mandrake root.
Graymold - This healing fungus is found near the deserted Alakas colony, SE of Calloc and just north of the Isle of Bigail.
Ember Flowers- North of Wainscotting (isolated in mid-west Valorim) in a swampy area.
More Ember Flowers- Go as far north west as you can, keeping to the Wainscotting side of a long range of mountains. The patch is near the quarantine wall, again in a swampy area.
?- In the Alien beast land, Footracer province. There are some alchemy ingredients in this forbidden area but the only people who knew about them have never been heard from again...

Just as important are the recipes to use the ingredients. Of course, you need the alchemy skill level to be able to make the potion properly. Here is a list of recipes, with the skill levels in brackets:

 Weak Curing and Weak Healing (1) - Walner in the Portal Fortress in Upper Exile. Need holly and comfrey root respectively.
Weak Poison (1) - Piglet in the Tower of the Magi or Bulon, an alchemist near the Wolfrider Warren. This needs either holly or spider glands.
Weak Speed (3) - Piglet in the Tower of the Magi or Kurtz in Fenris Port. This potion needs both comfrey root and wormgrass.
Medium Poison (3) - Kurtz in Fenris Port. This needs either wormgrass or spider glands.
Medium Healing (4) and Strong Curing (5) - Grossi in Sharimik. These both need glowing nettle.
Medium Speed (5) - Carlos in Lorelei. This needs glowing nettle and wormgrass.
Graymold Salve (7) and Weak Energy (9) - Carlos in Lorelei and Kyhar in Ghikra. Graymold Salve needs the rare graymold and weak energy needs wormgrass and asptongue mold.
Potion of Clarity (9) - The library of Khoth or the Library in Moon. Needs graymold and holly.
Strong Poison (10) and Strong Heal (12) - Nantier in Gale. Strong poision needs asptongue mold and strong heal needs graymold and comfrey root.
Killer Poison (12) - In the Library in Moon. This needs mandrake root.
Resurrection Balm (9) - Zalifar in the Remote Aerie or Howar in Blackcrag Fortress. This needs ember flowers to make.
Medium Energy(14) - Howar in Blackcrag Fortress. This needs mandrake root and asptongue mold.
Knowledge Brew(19) - Obtain recipe from Monastery of Madness, south of Storm Port (special quest). Needs mandrake roots and ember flowers.
N.B. - Make use of the Tower of the Magi before it is too late!

Most potions can be obtained from shops or dead enemies but the more powerful ones must be obtained from a powerful alchemist, such as Silverlocke who lives on an island in Upper Exile. Here is a list of the rarer potions:

 Potion of Clarity - This cures dumbfound, useful if your healers are dumbfounded so much that they can't cure themselves.
Brew of Battle - This powerful potion speeds up and blesses the user.
Knowledge Brew - Gives the user skill points, which can be converted into skills at a trainer's.
Scribbane Herb - An illegal drug which improves the user in combat but has bad side effects. Of course, I never used it (although it is readily available in the city of Gale, where the whole town seems stoned and even the mayor has some in his room!)

If you want to know where these towns I've referred to are, click here.