The valuation of food wastes and by-products has drawn a lot of attention from researchers which increases the sustainability of the food chain. The dairy sector is very concerned about managing its waste to minimize contamination of the environment by using it to make a variety of food and nonfood goods. The two main waste products from the dairy industry are thought to be whey and buttermilk. The book chapter offers a synopsis of the latest advancements in food waste usage in the manufacturing of dairy products. It enumerates the different ways that cheese whey and buttermilk are separated and utilized for producing a variety of products, such as beverages, and edible films that contain essential fatty acids, organic acids, microencapsulation matrix, and exopolysaccharides. Several extraction techniques, including nanofiltration, reverse osmosis, ultrafiltration, ultra-high-pressure homogenization, and standard homogenization, can be used to remove these wasteful dairy product components. These are utilized in microencapsulation technology to encapsulate probiotics, many bioactive compounds, and different types of essential oils. To highlight their use in the beverage sector, drinks containing whey and buttermilk have also been created. Microbial fermented products made from whey and buttermilk play a big part in the development of food products with added value. Whey protein concentrate is used to make edible coatings that are nontoxic, less expensive, and more widely available. Furthermore, whey and buttermilk have been used for extracting bioactive compounds, including organic acids, bioactive peptides, exopolysaccharides, and essential fatty acids. Furthermore, these can enhance the organoleptic, physicochemical, and rheological properties (such as gelatinization temperature, water absorption, and dough development time) v1- of baked items within the bakery sector. Using dairy waste materials to make a variety of products can help reduce environmental pollution, boost the nation’s economy, and introduce a variety of healthful dairy-based products, such as whey proteins, which have immunomodulatory, anticancer, antihypercholesterolemic, gelling, flavor, and emulsifying development characteristics.