Orange is highly nutritious and a source of phytochemical compounds. However, its by-products are usually discarded. In this study, we evaluated the effect of orange peel (OP) addition in orange jam on sensory, physicochemical, and nutritional characteristics. Four jam formulations were elaborated with different OP levels: OP0 (standard), OP4, OP8, and OP12 (Orange Peel 0, 4, 8 and 12%, respectively). All samples were evaluated for sensory acceptability, and physicochemical and nutritional composition. The addition of 12% orange peel in jam reduced (p < 0.05) the acceptability for all evaluated attributes, as well as overall acceptance and purchase intention. However, OP utilization increased (p < 0.05) the levels of water activity, soluble solids, titratable acidity, and sugars. Soluble solids/titratable acidity ratio, luminosity (L*), and yellow content (b*) decreased in all added OP jams, while red content (a*) increased. No change in the pH and moisture values of the product were observed after OP addition. Ash, protein, lipid, dietary fiber, ascorbic acid, carotenoids, phenolic compounds, and antioxidant capacity values increased after OP addition, while carbohydrate and energy content decreased. A texture test showed that adhesiveness decreased, while gumminess, chewiness, and elasticity increased after OP addition. We concluded that the addition of up to 8% orange peel in jam maintains sensory acceptability similar to that of the standard product. OP addition is a viable alternative to improve some of the product’s physicochemical and nutritional characteristics.