Potato peels (PP) are agro‐industrial co‐products generated in huge quantities by the potato processing industry. Obtaining value‐added products from PP is a current research challenge. As cyclic oligosaccharides is produced from starch by the action of cyclodextrin glucanotransferase (CGTase), β‐cyclodextrins (β‐CDs) are increasingly used in various industrial applications. In an attempt to develop a low‐cost process for β‐CDs production, starch is firstly extracted from PP. The productions of the US132 CGTase and β‐CDs are then optimized via experimental designs. The US132 CGTase production from the recombinant T7 express Escherichia coli strain is enhanced 20‐fold to reach 59.95 U mL−1. Subsequently, the β‐CDs production by the US132 CGTase is optimized to reach a high level (67.26 g L−1). The β‐CDs are then purified to homogeneity through a simple eco‐friendly crystallization method that provided a purification yield of 20%. This study reveals that β‐CDs production from valorized starch is a promising strategy used to valorize PP and minimize β‐CDs production cost.

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