The majority of the by products formed during onion processing remain unutilized, yet they are rich in bioactive compounds and phytochemicals. Onions are a very valuable vegetable. Onion chemical compounds are incredibly diverse, and they work through a variety of pharmacological mechanisms to prevent disease. Although the mechanism of the action of the chemicals found in onions has been studied, there is still room for further reformulating of nutrient supplements and pharmaceutical treatments thanks to a growing interest in sustainable resource utilisation and circular economy. This review focuses on the primary bioactive components found in onion peel and skin, particularly total phenolics, quercetin, total flavonoids, and their derivatives, as well as their therapeutic uses such as cardioprotective, anticancer, neuroprotective, antiobesity, antidiabetic, and antibacterial constituents. This review article noted that onion peel is a valuable agricultural byproduct that has a variety of biologically active compounds so it can be used as a health-regulating ingredient, particularly in the biomedical and pharmacological domains.