Banana pseudostem, the fibrous aerial stem of the banana plant discarded after fruit harvesting, represents one of the most underutilized agro-residues despite its exceptional nutritional, therapeutic, and industrial potential. Recent scientific investigations have demonstrated that banana pseudostem is a rich reservoir of dietary fibre, cellulose, hemicellulose, lignin, resistant starch, essential minerals, polyphenols, flavonoids, and bioactive phytochemicals that contribute significantly to human health and sustainable industrial development. Pseudostem contains considerable amounts of potassium, calcium, magnesium, iron, and vitamin-rich compounds, along with both soluble and insoluble fibres that aid gastrointestinal function, lipid metabolism, glycemic regulation, and detoxification processes. It’s high fibre content improves bowel movement, enhances satiety, reduces cholesterol absorption, and supports gut microbiota modulation, thereby lowering the risk of obesity, diabetes mellitus, cardiovascular disorders, and colon-related diseases. Bioactive constituents such as phenolic acids, tannins, and antioxidants exhibit strong free radical scavenging activity, anti-inflammatory effects, antimicrobial properties, and nephroprotective potential, particularly in the prevention of kidney stone formation and urinary tract disorders. Recent years, banana pseudostem has emerged as a promising functional food ingredient and nutraceutical resource. The tender central core is increasingly utilized for the development of health-oriented value-added products including juice, syrup, squash, candy, pickles, jam, flour, cookies, bread, noodles, and dietary fibre supplements. Scientific studies have reported that incorporation of banana pseudostem powder or fibre into food formulations improves nutritional quality, water-holding capacity, texture stability, and antioxidant activity while reducing caloric density. Furthermore, pseudostem extracts have shown potential therapeutic applications in traditional and modern medicine due to their diuretic, hypoglycemic, hepatoprotective, and antiurolithiatic properties.