Abstract: With the growing global concern for sustainability and the circular economy, the development and application of environmentally friendly food packaging materials have become important research priorities in the food industry and packaging sector. In recent years, food packaging films based on agricultural by-products have garnered considerable attention due to their potential to alleviate plastic pollution and enhance resource utilization efficiency. These by-products are inherently rich in polysaccharides, polyphenols, natural pigments, and antimicrobial bioactive compounds, rendering them ideal raw materials for the fabrication of high-performance and multifunctional food packaging films. Herein, this review firstly provides a comprehensive overview of the utilization of agricultural by-products, particularly polysaccharide-, protein-, cellulose-, and lignin-based materials in food packaging applications. It then focuses on their effects on key functional properties of packaging materials, such as antibacterial and antioxidant properties, mechanical performance, barrier properties, and cushioning functionality. Furthermore, the technical bottlenecks and developmental challenges encountered during industrial implementation are critically analyzed from the perspectives of mechanical and bioactive stability, processing compatibility, and industrial scalability. Emerging applications of agricultural by-products-based food packing films in intelligent packaging, active preservation, radiation-shielding and controlled-release functional packaging are also highlighted. Finally, prospective research directions are outlined to inform future innovation and accelerate the advancement of sustainable and next-generation food packaging materials.