The agri-food industry generates substantial quantities of by-products and processing residues that remain underutilized despite their significant nutritional and functional potential. Growing evidence indicates that these materials are rich sources of bioactive compounds, including polyphenols, flavonoids, dietary fibers, bioactive peptides, carotenoids, phytosterols, and omega-3 fatty acids. These constituents exhibit antioxidant, anti-inflammatory, antimicrobial, cardiometabolic, and gut-modulating properties supported by preclinical studies and emerging human evidence. This review provides an updated synthesis of the composition of major agri-food by-products, the mechanisms underlying their biological activities, and their applications in functional foods and nutraceutical formulations. Particular emphasis is placed on distinguishing evidence derived from in vitro, animal, and human studies, together with discussion of bioavailability, dose considerations, and translational relevance. Advances in sustainable recovery technologies, including ultrasound-assisted extraction, enzyme-assisted extraction, supercritical fluid extraction, and fermentation, have improved the yield, stability, and functionality of bioactive compounds, facilitating their incorporation into food systems. Valorized by-product ingredients have been successfully applied in fiber-enriched bakery products, antioxidant beverages, lipid-lowering supplements, marine collagen formulations, and prebiotic food products. However, important challenges remain, including compositional variability, extract standardization, regulatory approval, labeling, and robust clinical validation of health claims. Future research should prioritize well-designed human trials, optimized formulations, and comprehensive bioavailability assessment to ensure efficacy and safety. Overall, agri-food by-products represent valuable and sustainable sources of nutritionally relevant bioactive compounds with considerable potential for functional food innovation, chronic disease risk reduction, and the advancement of circular bioeconomy strategies.



