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Globally, oat is one of the most important but underutilized cereal grains. Oat grain is a health‐beneficial cereal crop with a high content of multiple nutrient substances. The desire of consumers for health has led to the exploration of functional ingredients and novel food‐processing techniques for oat grain. This review first evaluates the nutrient composition of oats, with a specific emphasis on oat starch, β‐glucans, proteins, and phenolics, which is an explanation for the health potential in terms of nutrition. Recently, oat grain has been used to develop functional foods and beverages and as an ingredient incorporated into other foods. Then, the processing methods of oat‐based foods in various physical formats, such as whole grain, flakes, and flour, are systematically summarized. In addition, the effects of bran and β‐glucan as food ingredients on the sensory and nutritional quality of products are also discussed. Finally, this review highlights the effects of interactions between β‐glucan, used as a potential natural multifunctional additive in food applications, and different components on the processing and nutritional properties of oat products. The objective of this review is to synthesize knowledge in the field to provide a comprehensive understanding of the nutritional composition and processing methods of oats and to demonstrate interactions between different components, thereby further benefiting the development of oats in food systems as a functional component and food additive to improve food quality, safety, and health functions.

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