Consumer's interest for health promoting foods has reshaped the food industry to come up with novel biological compounds with diverse health benefits. Postbiotic are the cell fractions, or cell lysates which have emerged as potential functional food compounds during the last decade. The health benefits of postbiotic are well established while attempts are underway to understand their interaction, production, processing and safety. The review explore the challenges and opportunities to devise better growth mediums, cell lysis and extraction, characterization, stability and applications of postbiotics in both food and pharma industry along with the market trends, success stories and safety concerns regarding postbiotics. The scientific and commercial interest in postbiotic have resulted in extensive investigations and clinical documentation of various physiological benefits and additional bioactivity. The findings validate food and pharma application of the postbiotics and further emphasize on documentation of bioactivity and safety of these compounds.