Blood is generated in very large volumes as a by-product in slaughterhouses all around the world. On the one hand, blood generation presents a serious environmental issue because of its high pollutant capacity; however, on the other hand, blood has the potential to be collected and processed to generate high-added-value food ingredients based on its exceptional nutritive value and its excellent functional properties. In this paper, we review the current state of the art for blood processing, from collection to final recovery of protein isolates, the functional properties of blood, impact of processing on functional properties, and potential applications as food ingredients. Furthermore, future challenges are outlined for this underutilized and abundant product from the meat industry.