Papaya contains high amounts of vitamins A, C, riboflavin, thiamine, niacin, ascorbic acid, potassium, and carotenoids. It is confirmed by several studies that all food waste parts such as the fruit peels, seeds, and leaves of papaya are potential sources of phenolic compounds, particularly in the peel. Considering the presence of numerous bioactive compounds in papaya fruit peels, the current study reports a rapid, cheap, and environmentally friendly method for the production of gold nanoparticles (AuNPs) employing food biowaste (vegetable papaya peel extract (VPPE)) and investigated its antioxidant, antidiabetic, tyrosinase inhibition, anti-inflammatory, antibacterial, and photocatalytic degradation potentials. The phytochemical analysis gave positive results for tannins, saponins, steroids, cardiac steroidal glycoside, protein, and carbohydrates. The manufactured VPPE-AuNPs were studied by UV–Vis scan (with surface plasmon resonance of 552 nm), X-ray diffraction analysis (XRD) (with average crystallite size of 44.41 nm as per the Scherrer equation), scanning electron microscopy–energy-dispersive X-ray (SEM-EDS), thermogravimetric analysis (TGA), Fourier transform infrared spectroscopy (FT-IR), particle size, zeta potential, etc. The mean dimension of the manufactured VPPE-AuNPs is 112.2 d.nm (PDI—0.149) with a −26.1 mV zeta potential. The VPPE-AuNPs displayed a significant antioxidant effect (93.24% DPPH scavenging and 74.23% SOD inhibition at 100 µg/mL); moderate tyrosinase effect (with 30.76%); and substantial α-glucosidase (95.63%) and α-amylase effect (50.66%) at 100 µg/mL. Additionally, it was found to be very proficient in the removal of harmful methyl orange and methylene blue dyes with degradation of 34.70% at 3 h and 24.39% at 5 h, respectively. Taken altogether, the VPPE-AuNPs have been proven to possess multiple biopotential activities, which can be explored by the food, cosmetics, and biomedical industries.