Valorization of by-products from the fruit-processing industry is economically important as it can reduce waste, lower disposal costs, and create new revenue streams. The rise in pomegranate fruit production and processing into various products, such as juices and concentrates, is driven by its medicinal benefits and nutritional value, leading to increased generation of by-products like peels and seeds. There is a huge potential to transform by-products from pomegranate fruit processing into value-added products. By utilizing various nutrients and bioactive compounds, such as polyphenols, flavonoids, anthocyanins, and vitamins, which offer multiple health benefits, such as antiproliferative, antioxidant, antidiabetic, anti-inflammatory, anti-allergic, and antimicrobial effects, it is possible to create value-added products from pomegranate by-products that can be used in food applications. This promotes food safety, nutrition, and sustainable innovation. Pomegranate seed (PS) and peel extracts have beneficial technological impacts when incorporated into various food products. To enhance the economic benefits of by-products from pomegranate fruit processing, it is crucial to apply sustainable and innovative methods for processing the bioactive compounds, “turning waste to gold.” Additionally, considerations regarding quality, safety, and commercialization must be addressed to ensure their successful integration into the food system and promotion of a food circular economy.