Cheese is a product of ancient biotechnological practices, which has been revolutionized as a functional food product in many parts of the world. Bioactive compounds, such as peptides, polysaccharides, and fatty acids, have been identified in traditional cheese products, which demonstrate functional properties such as antihypertensive, antioxidant, immunomodulation, antidiabetic, and anticancer activities. Besides, cheese‐making probiotic lactic acid bacteria (LAB) exert a positive impact on gut health, aiding in digestion, and improved nutrient absorption. Advancement in biotechnological research revealed the potential of metabolite production with prebiotics and bioactive functions in several strains of LAB, yeast, and filamentous fungi. The application of specific biocatalyst producing microbial strains enhances nutraceutical value, resulting in designer cheese products with multifarious health beneficial effects. This review summarizes the biotechnological approaches applied in designing cheese products with improved functional properties.