Tea is the second most consumed beverage in the world after water. In recent years, the health benefits of both green and black tea have been actively investigated. Several key bioactives such as epicatechin, epigallacatechin gallate, theaflavins, theannine, and black tea polyphenols have been identified and have been linked to unique health benefits. These health benefits imply that there is significant potential to develop functional teas that deliver efficacious levels of tea bioactives. The health benefits that are useful in the context of developing functional teas relate to (i) improvement in vascular function for epicatechin and black tea polyphenols, (ii) antiobesity or weight loss with epigallocatechin gallate as the bioactive, (iii) cholesterol‐lowering and antiinflammatory effect for theaflavins, and (iv) a calm or relaxed mental state and improved immunity due to theanine. In addition to the health benefits, the flavor of tea is an important attribute and it can be manipulated using tea aroma compounds. The requisite levels of these molecules are different from the currently existing levels. Biotechnology is the primary route to deliver efficacious levels of these bioactives in tea and also for engineering the tea flavor using tea aroma. The biotechnological approaches that are useful are (i) the engineering of the biosynthetic pathway; (ii) the enzymatic/microbial biosynthesis of the molecules of interest; and (iii) extraction of these molecules from tea, purification and subsequent incorporation into the tea product. These approaches are discussed with specific examples to establish the current status of the technology and the future applications for the development of functional teas.