Legume seeds have an important role as nutraceuticals in human health (providing protein, carbohydrates, fiber, amino acids, and micronutrients) and act as sustainable food sources in livestock farming and aquaculture. Legume seeds contain a wide range of bioactive compounds that have significant health benefits, mainly classified under phenolic compounds, phytosterols, oligosaccharides, carbohydrates, and saponins. Some of these compounds play an important role in plant defense mechanisms against predators and environmental conditions. Heat-labile antinutritional factors (protease inhibitors and lectins) and heat-stable antinutritional factors (tannins and phytic acid) can be reduced by thermal treatment or postharvest to eliminate any potential negative effects from consumption. Substantial studies have demonstrated that these bioactive compounds possess multiple biological activities, including antioxidant properties, antibacterial, anticancer, anti-inflammatory, antidiabetic, cardiovascular protective. They also have various values for aquaculture, such as fishmeal alternative. In this review, the main bioactive compounds and important biological functions of legume seeds are summarized, and the mechanism of action is discussed.