<p>This review evaluates the progress in the extraction and chemical modification of keratin with respect to the requirements for industrial packaging applications. It shows the impact of chemical modification on improving tensile strength to reach the minimum requirements of some packaging materials, although the thermoset nature of keratin limits its flexibility compared to other conventional thermoplastics. The key limitations are found in absorbency, barrier, and resistivity properties, which restrict broader application in packaging applications. Other essential mechanical properties, including impact resistance and the compatibility of keratin with scalable manufacturing processes, have not been fully explored. An analysis of these challenges from a structure–property–processing perspective shows that these limitations are closely related to molecular changes during extraction and the nature of subsequent modifications. In summary, keratin shows promise as a sustainable material for packaging, but targeted advances in processing strategies and material design are necessary to enable practical implementation.</p>