Fruits and vegetables are the most utilized commodities among all horticultural crops. They are consumed raw, minimally processed, as well as processed, due to their nutrients and health‐promoting compounds. With the growing population and changing diet habits, the production and processing of horticultural crops, especially fruits and vegetables, have increased very significantly to fulfill the increasing demands. Significant losses and waste in the fresh and processing industries are becoming a serious nutritional, economical, and environmental problem. For example, the United Nations Food and Agriculture Organization (FAO) has estimated that losses and waste in fruits and vegetables are the highest among all types of foods, and may reach up to 60%. The processing operations of fruits and vegetables produce significant wastes of by‐products, which constitute about 25% to 30% of a whole commodity group. The waste is composed mainly of seed, skin, rind, and pomace, containing good sources of potentially valuable bioactive compounds, such as carotenoids, polyphenols, dietary fibers, vitamins, enzymes, and oils, among others. These phytochemicals can be utilized in different industries including the food industry, for the development of functional or enriched foods, the health industry for medicines and pharmaceuticals, and the textile industry, among others. The use of waste for the production of various crucial bioactive components is an important step toward sustainable development. This review describes the types and nature of the waste that originates from fruits and vegetables, the bioactive components in the waste, their extraction techniques, and the potential utilization of the obtained bioactive compounds.