Abstract: Yam, as a traditional medicinal and edible plant, is enriched with multiple biologically functional components including polysaccharides, saponins, polyphenols, proteins, and allantoin, demonstrating significant development potential and broad application prospects in the food and health product sectors. Modern pharmacological studies have shown that yam possesses various efficacies such as blood glucose reduction, blood lipid lowering, immunity enhancement, antioxidation, anti-aging, and anti-tumor activity, with mechanisms involving the regulation of insulin signaling pathways, improvement of lipid metabolism, and activation of immune cells. In the food industry (powder, slices, beverages) and the health product sector (capsules, granules, oral liquids), yam is recognized as having extensive deep-processing potential, and its active ingredients are considered the critical foundation for developing novel functional products. In this review, the mechanisms of action of bioactive components derived from yam tubers are systematically summarized, along with their applications in food and health products; future research directions are also prospected. It is intended that this work will provide scientific support and innovative ideas for enhancing the level of yam deep processing and deepening functional research, thereby facilitating the in-depth expansion of research in this field.