Poultry feather waste is an abundant yet underutilized agro-industrial byproduct composed primarily of recalcitrant β-keratin, which exhibits significant resistance to proteolysis due to its high cysteine content and extensive hydrogen bonding. Conventional keratin processing methods, including chemical hydrolysis and thermal incineration, are energy-intensive, environmentally damaging, and often degrade essential amino acids. In this chapter, we highlight the keratinolytic potential of the extremely thermophilic anaerobe Fervidobacterium islandicum AW-1, which enables efficient bioconversion of feather keratin under high-temperature, anaerobic conditions. We present a comprehensive overview of the keratin degradation system in F. islandicum AW-1, supported by integrated genomic, proteomic, biochemical, and structural analyses. In addition, we introduce a novel soluble β-keratin substrate-based assay that enables high-resolution profiling of proteolytic specificity and enzyme kinetics. Downstream valorization pathways are also discussed, including the identification and function validation of low-molecular-weight bioactive peptides with antioxidant and skin-protective activities. This case study illustrates the broader potential of extremophile-derived enzymes in sustainable bioprocessing for high-value industrial and cosmeceutical applications. Finally, we propose how this microbial platform can be integrated into a closed-loop, zero-waste circular bioeconomy model to produce biostimulants, biodegradable plastics, and bioenergy from feather waste.