Food matrices contain bioactive compounds that have health benefits beyond nutritional value. The bulk of bioactive chemicals are still present in agro-industrial by-products as food matrices. Throughout the food production chain, there is a lot of agro-industrial waste that, if not managed effectively, could harm the environment, company, and how nutritiously and adequately people eat. It’s important to establish processes that maximise the use of agro-industrial by-products, such as biological technologies that improve the extraction and acquisition of bioactive compounds for the food and pharmaceutical industries. As opposed to nonbiological processes, biological procedures provide high-quality, bioactive extracts with minimum toxicity and environmental impact. Fermentation and enzymatic treatment are biological processes for obtaining bioactive compounds from agro-industrial waste. In this context, this article summarises the principal bioactive components in agro-industrial byproducts and the biological methods employed to extract them. In this review efficient utilization of bioactive compounds from agro-industrial waste more effectively in food and pharmaceutical industries has been described.