Avocado (Persea americana) is a unique fruit with exceptional nutritional and technological characteristics, as well as proposed health benefits. Moreover, the commercial utilization of avocado to make guacamole and/or to extract its oil for several applications generates massive amounts of avocado bio-wastes, including peels and seeds by-products, which further impact the environment and waste management costs. Within this article, the proposed health benefits of moderate avocado consumption, as a functional component of a balanced diet against inflammation-related chronic disorders, and its potential applications are fully addressed. The numerous bioactive compounds present in avocado fruit and its by-products, such as its bioactive phenolics, dietary fiber, and lipid bioactives like unsaturated fatty acids and polar lipids, are also thoroughly outlined. The functional anti-inflammatory, antithrombotic, and antioxidant properties of each of these bioactives and avocado extracts, are then thoroughly reviewed. Emphasis is given to these avocado-derived bioactives and extracts that have the potential to be utilized in various industrial applications, such as in functional foods, supplements, nutraceuticals, and cosmetics related health-promoting applications. The limitations and future perspectives of these applications based on avocado bioactives are also discussed.