The current practice of fish processing generates large amounts of by-products, which can account for up to three-quarters of the total fish weight. Despite the presence of several valuable components in the fish processing discards, the latter are usually dumped into landfills or at sea, having potentially harmful environmental effects or end up as low commercial value products (e.g., white fish meal). Still, fish processing by-products can be considered as an alternative raw material for the preparation of high-protein ingredients, especially for the production of food grade gelatin due to the presence of large amounts of collagen in fish skins, scales, and bones. Although fish gelatin is an alternative to the commercially available mammalian gelatins, its production on a large commercial scale has been hampered, mainly, due to the inferior quality characteristics compared to its mammalian counterparts. This review article summarizes and highlights the potential utilization of by-products generated during fish processing for gelatin extraction. Furthermore, several technical challenges and directions of ongoing research are discussed.