<p>Recent advancements in green extraction and encapsulation technologies have significantly enhanced the potential of dietary polyphenols in modern nutrition. This review examines recent studies on dietary polyphenols, with a focus on various green extraction techniques and how encapsulation affects polyphenol bioavailability. It also highlights dietary sources of polyphenols and their technological roles in food innovation, such as their use as functional ingredients, natural antioxidants, and antimicrobial agents. These advancements hold several practical implications for the functional food sector. Green extraction methods reduce environmental impact by minimizing energy consumption and avoiding toxic solvents, supporting eco-friendly food production. Encapsulation on the other hand enhances the stability and bioavailability of polyphenols during processing, storage, and digestion, ensuring consistent health benefits and enabling their integration into diverse food matrices without compromising sensory quality. By optimizing extraction yields and protecting bioactives from degradation, these technologies improve cost efficiency and reduce food waste, making functional food production more economically viable. Despite their promising benefits, the review acknowledges that the efficacy of polyphenol-rich extracts is often dose-dependent, recommending a multifaceted research approach to address these challenges. This includes exploring dose–response relationships and optimal consumption levels and enhancing bioavailability through advanced encapsulation techniques. Long-term health outcomes, safety profiles, and synergistic effects with other bioactives require detailed exploration, while personalized nutrition strategies should consider population-specific responses to polyphenols. By addressing these critical insights, this review aims to advance the integration of polyphenols into functional foods, ensuring sustainability, efficacy, and broad accessibility in modern nutrition.</p>