Display omitted •Avocado fruit and its by-products are rich sources of nutrients and phytochemicals.•Avocado by-products exert anti-proliferative and anti-inflammatory activities.•Avocado seeds phytochemical improves carbohydrate and lipid metabolism.•Starch and dietary fiber from avocado by-products could be used as biomaterials.•Avocado phytochemicals could be used in the food, pharmaceutical, and cosmetic industries. The increased demand for avocado, and therefore production and consumption, generate large quantities of by-products such as seeds, peel, and defatted pulp, which account for approximately 30% of fruit weight, and which are commonly discarded and wasted. The present review focuses on various compounds present in avocado fruit and its by-products, with particular interest to those that can be potentially used in different industrial forms, such as nutraceuticals, to add to or to formulate functional foods, among other uses. Main molecular families of bioactive compounds present in avocado include phenolic compounds (such as hydroxycinnamic acids, hydroxybenzoic acids, flavonoids and proanthocyanins), acetogenins, phytosterols, carotenoids and alkaloids. Types, contents, and possible functions of these bioactive compounds are described from a chemical, biological, and functional approach. The use of avocado and its by-products requires using processing methods that allow highest yield with the least amount of unusable residues, while also preserving the integrity of bioactive compounds of interest. Avocado cultivar, fruit development, ripening stage, and processing methods are some of the main factors that influence the type and amount of extractable molecules. The phytochemical diversity of avocado fruit and its by-products make them potential sources of nutraceutical compounds, from which functional foods can be obtained, as well as other applications in food, health, pigment, and material sectors, among others.