Over the years, human lifestyle and food habits have changed drastically. This current century has also seen an increased awareness about personal well-being, raising consumer demands for obtaining functional ingredients in concentrated forms to meet nutrient requirements and combat diseases. The hunt for these ‘nutraceuticals’ has triggered exploratory research for obtaining such natural bioactive compounds. While there has been a significant advancement in obtaining bioactives from microbial and animal sources, they face severe apprehensions on ethical grounds. Moreover, the product titres obtained from these routes are considerably lower and fail to suffice as a reliable resource. Therefore, it becomes inevitable to unleash the underutilized potential of agro-food wastes, which is rich in various bioactive compounds, like lipids, proteins, fibres, flavonoids, phytochemicals, etc. However, these by-products and agro-food wastes are ascribed with complexities and recalcitrant natures owing to the diverse segments which generate them together in enormous amounts every day. These adversities, therefore, challenge their sustainable and complete utilisation. Moreover, the uncertainties associated with the qualitative and quantitative aspects of agro-food wastes also limit their applicability. This chapter discusses recent advances and possibilities of developing selective strategies for recovery, encapsulation, and applying nutraceuticals derived from agro-food wastes.