Fermented dairy products have been essential elements in the diet of Southern Mediterranean countries for centuries. This review aims to provide an overview of the traditional fermented products in Southern Mediterranean countries, with a focus on fermented dairy products, and to discuss innovative strategies to make improved versions of these traditional products. A large variety of fermented dairy products were reviewed, showing high diversity, depending on the used raw materials, starter cultures, and preparation procedures. Traditionally, dairy products were fermented using spontaneous fermentation, back-slopping, and/or the addition of rennet. Compared with commercial products, traditional products are characterized by peculiar organoleptic features owing to the indigenous microflora. The main limitation of traditional products is preservation as most products were consumed fresh. In addition to drying, brine or oil was used to extend the product shelf life but resulted in high salt/fat products. Several studies suggested alternative ingredients/processing to make revised products with new flavors, improved nutritional quality, and a longer shelf life. There is still plenty of room for more research to obtain a better understanding of the indigenous microflora and on quality improvement and standardization to reach a wider market.