The rapid growth of the global population and changes in lifestyle have led to a significant increase in food waste from various industrial, agricultural, and household sources. Nearly one-third of the food produced annually is wasted, resulting in severe resource depletion. Food waste contains rich organic matter, which, if not managed properly, can pose a serious threat to the environment and human health, making the proper disposal of food waste an urgent global issue. However, various types of food waste, such as waste from fruit, vegetables, grains, and other food production and processing, contain important bioactive compounds, such as polyphenols, dietary fiber, proteins, lipids, vitamins, organic acids, and minerals, some of which are found in greater quantities in the discarded parts than in the parts accepted by the market. These bioactive compounds offer the potential to convert food waste into value-added products, and fields including nutritional foods, bioplastics, bioenergy, biosurfactants, biofertilizers, and single cell proteins have welcomed food waste as a novel source. This review reveals the latest insights into the various sources of food waste and the potential of utilizing bioactive compounds to convert it into value-added products, thus enhancing people’s confidence in better utilizing and managing food waste.