Over the past decade, the world’s population has grown rapidly, driving the expansion of the food processing industry to meet the growing demand for a variety of food products. Concurrently, food processing generates a significant amount of food by-products. Predictably, these by-products are disposed of as food waste, leading to detrimental environmental and economic impacts. Lemon peel, a primary by-product of lemon processing, represents a significant proportion of this waste. Nevertheless, lemon by-products contain valuable substances with remarkable nutritional and bioactive properties, holding promise for food applications. These by-products are rich in nutrients, especially minerals, vitamin C, pectin, and other dietary fibers, and phytochemical compounds with desirable properties, mainly phenolic compounds and essential oils. In addition, lemon by-products have been shown to have great bioactive properties, including antioxidant and antimicrobial activities. Lemon by-products show great potential for applications in the food industry, including (1) food ingredients/additives offering both nutritional value and extended shelf-life; and (2) film matrices or active constituents for edible food coatings, especially for their antioxidant and antimicrobial properties. This chapter provides a comprehensive summary of the recovery and valorisation of the main functional ingredients and additives from lemon by-products, their nutritional and phytochemical profile, bioactive properties and potential applications in the food industry.