Waste streams originating from a variety of industrial and domestic sources if not properly regulated pose a serious threat toward environment. A large portion of these wastes is a direct consequence of a linear economy model, focusing on the “take-make-dispose” approach. However, biotechnological methods have emerged as a promising solution for converting biowaste into high-value products, such as enzymes, biopigments, and biofuels. These methods offer several advantages over traditional methods, including lower production costs and enhanced environmental sustainability. Techniques including solid and submerged fermentation made possible to valorize residual biomass into industrially useful products in a cost-effective and sustainable manner. Innovative strategies, supercritical fluid extraction, microwave-assisted extraction, and ultrasound-assisted extraction, have significantly enhanced extraction and yield of bioactive compounds in an eco-friendly way. Despite being a promising solution and important part of circular economy-based model, the synthesis of bioproducts from biowaste has numerous challenges including efficient scale-up, cost-effective raw material availability, cost competitiveness with the existing products, disparities among international regulations for commercialization of bioproducts, and consumer perception. Addressing these challenges can result in effective utilization of biowaste and implementation of circular economy model for a greener, more sustainable future.