<p><i>Hass</i> avocado peel and seed, often treated as agro-industrial waste, are emerging sources of valuable lipids with potential functional applications across food, nutraceutical, and cosmetics industries. As sustainability emerges as a key point in industrial product development, the use of food-grade and environmentally friendly solvents is essential for recovering functional compounds from these underutilized matrices. To promote the sustainable reuse and the valorization of avocado by-products, this study analyzed the lipid profile and biological potential of ethanol extracts from seed and peel of <i>Hass</i> avocado cultivated in Portugal obtained through ultrasound-assisted extraction (UAE), a green and food-grade technique. The extraction efficiency was compared to the Folch-like method, a benchmark for lipid extraction. Lipid profiles of <i>Hass</i> by-product extracts were comprehensively characterized by reversed-phase high-performance liquid chromatography coupled with high-resolution tandem mass spectrometry (C18-RP-HPLC-MS/MS). Furthermore, their antioxidant, anti-inflammatory, and anti-diabetic properties were assessed. Although green extracts yielded lower lipid content due to co-extraction of non-lipid components, their lipid profile and anti-inflammatory effects, including the inhibition of cyclooxygenase-2 (COX-2) activity, reduction of nitric oxide (^·NO) production, and downregulation of <i>Il1β</i> and <i>Il6</i> gene transcription in lipopolysaccharide (LPS)-stimulated macrophages, closely resembled those obtained by the conventional extraction method. Additionally, green extracts from <i>Hass</i> peel and seed exhibited remarkable antioxidant and anti-diabetic activities, further underscoring their potential as a source of functional lipid ingredients for health-promoting applications. UAE emerges as a sustainable method for the reutilization of avocado by-products, aligning with clean-label and circular bioeconomy principles.</p>