SummaryThe quest for a green and sustainable environment has created innovative ways of recycling and valorising agro‐based wastes, as well as using uncommon raw materials for food products. Likewise, food proteins and peptides are potentially generated from unique sources such as seaweeds, insects, hemp, rapeseed cake, olive meal cake, sesame meal, flaxseed cake, sunflower meal, spent grain, pomace, and pit for the development of functional foods and biopeptide‐based products. These biopeptides confer numerous positive health benefits against chronic diseases such as cancer, obesity, type 2 diabetes, hypertension, and neurodegeneration. In this review, diligent efforts were made to provide an updated status on the biopeptides produced from various unusual sources with certain salient considerations towards their production, biological activities, action mechanisms, and safety. We also discussed the possible drawbacks encountered during their applications in the nutraceutical and functional food industries.