<p>The rapid expansion of aquaculture and fish processing industries has resulted in the annual generation of approximately 99&#xa0;million tons of fishery byproducts, including heads, bones, skin, viscera, and fish scales. These residual biomasses are typically underutilized despite their richness in proteins, lipids, collagen, and other bioactive compounds. Recent advancements in enzymatic valorization, particularly through the application of cold-adapted marine proteases, have offered eco-efficient solutions for converting these byproducts into high-value bioactive peptides and nutraceutical ingredients. Cold-adapted proteases function efficiently at low temperatures, preserving thermolabile compounds, reducing energy input, and minimizing undesirable reactions. This review critically examines the biochemical composition of fishery by-products and explores the distinctive structural and catalytic properties of cold-adapted proteases. We highlight novel strategies for their discovery using metagenomics, bioinformatics and AI-assisted enzyme engineering. Process optimization aspects, including the use of membrane bioreactors, immobilization supports, and downstream purification techniques, are discussed, with an emphasis on improving the yield, stability, and scalability. The bioactivities of the derived peptides, such as antioxidant, ACE-inhibitory, antimicrobial, and anti-inflammatory effects, are summarized alongside their emerging functional roles in metabolic regulation and in wound healing. This article presents case studies, economic assessments, and regulatory considerations to evaluate the commercial viability of cold-adapted biocatalysis in the circular blue bioeconomy. Finally, technical limitations, such as enzyme deactivation, recovery, and cost-performance ratios, are critically analyzed, and future directions for sustainable marine biorefinery development are discussed.</p>