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Many would argue that compound exercises such as squats are more beneficial but deadlifting is one of the best compound exercises you can do to increase strength and muscle mass. It works virtually every muscle, with emphasis on the quadriceps, hamstrings, gluteus maximus and most muscles of the back and also the forearms.
When performed correctly the role of the arms in the deadlift is only that of cables attaching the weight to the body; the musculature of the arms should not be used to lift the weight. There is no movement more basic to everyday life than picking a dead weight up off of the floor, and for this reason focusing on improving one's deadlift will help prevent back injuries.