The tiger nut is the tuber of Cyperus esculentus L., which is a high-quality wholesome crop that contains lipids, protein, starch, fiber, vitamins, minerals and bioactive factors. This article systematically reviewed the nutritional composition of tiger nuts; the processing methods for extracting oil, starch and other edible components; the physiochemical and functional characteristics; as well as their applications in food industry. Different extraction methods can affect functional and nutritional properties to a certain extent. At present, mechanical compression, alkaline methods and alkali extraction–acid precipitation are the most suitable methods for the production of its oil, starch and protein in the food industry, respectively. Based on traditional extraction methods, combination of innovative techniques aimed at yield and physiochemical characteristics is essential for the comprehensive utilization of nutrients. In addition, tiger nut has the radical scavenging ability, in vitro inhibition of lipid peroxidation, anti-inflammatory and anti-apoptotic effects and displays medical properties. It has been made to milk, snacks, beverages and gluten-free bread. Despite their ancient use for food and feed and the many years of intense research, tiger nuts and their components still deserve further exploitation on the functional properties, modifications and intensive processing to make them suitable for industrial production.