The important roles of food packaging are food protection and preservation during processing, transportation, and storage. Food can be altered biologically, chemically, and physically if the packaging is unsuitable or mechanically damaged. Furthermore, packaging is an important marketing and communication tool to consumers. Due to the worldwide problem of environmental pollution by microplastics and the large amounts of unused food wastes and by-products from the food industry, it is important to find more environmentally friendly alternatives. Edible and functional food packaging may be a suitable alternative to reduce food waste and avoid the use of non-degradable plastics. In the present review, the production and assessment of edible food packaging from food waste as well as fruit and vegetable by-products and their applications are demonstrated. Innovative food packaging made of biopolymers and biocomposites, as well as active packaging, intelligent packaging, edible films, and coatings are covered.