Recent research has substantially focused on residual subproducts containing chemical compounds with bioactive properties. Even though there are some culinary or medicinal uses of Capsicum seeds, there is still a seed mass waste from pepper processing. Many pepper leading producer countries generally lack the facilities and infrastructure required for such processing technologies and so, pepper seeds are usually either destroyed or employed as landfilling or as animal feed. This involves an inadvertent economic loss for producers as well as a detrimental environmental impact. However, there is a hidden potential within the pepper processing industry related to valorization of pepper seeds to obtain added value by-products and thus reduce generated waste. Pepper seeds are a good source of antioxidants, carotenoids, phenolic acids, flavonoids, and vitamins C, E, and A and are also rich in volatile compounds, among others. The unique alkaloids of this genus are capsaicinoids and capsainoids, which have been linked to many beneficial biochemical and pharmacological effects including anti-oxidative or anti-inflammatory activities. Other prominent bioactive compounds of peppers seeds include saponins, lectins, and polyunsaturated fatty acids. In this context, an overview of the biological properties, extraction systems, and possible industrial application of bioactive compounds of pepper whole fruit and seeds is presented.