Citrus peels are rich in bioactive phenolic compounds with various health effects including antioxidant, antiobesity, antiinflammatory, antihypertensive, antihypercholesterolemic, antimicrobial, antidiabetic, and anticarcinogenic activities. Both extractable and nonextractable phenolics are present in significant amounts in Citrus peel with diverse bioactivities. While extractable phenolics can be recovered from the fruit peels by conventional extraction methods, nonextractable phenolics remaining in the residues must be released from the cell matrix first by hydrolysis with acid, alkali, or enzymes. Novel processing technologies can help in improvement of extraction efficiency. Extreme process or medium conditions degrade phenolics and their bioactivity where encapsulation can be applied to improve their stability, solubility, and bioactivity. Citrus peel powder including ascorbic acid and dietary fiber besides phenolics or extracts therefrom can be used as functional food ingredients to extend shelf life and provide health benefits. In addition, phenolic extracts can be used as antioxidant and antimicrobial agents in active food packaging applications. Phenolic extracts have also a potential to be used as nutraceuticals and pharmaceuticals. In this review, phenolic compounds in different forms in Citrus peels, their recovery, bioactivity and possible applications for upcycling in the industry are presented.