Alginate oligosaccharides (AOS) are low-molecular-weight fragments produced by depolymerizing alginate from brown seaweeds. Rich in guluronic and mannuronic residues, AOS show broad bioactivity, including antioxidant, prebiotic, immunomodulatory, and antimicrobial effects, supporting their inclusion in functional foods. In food systems, they act as stabilizers, thickeners, fat replacers, and encapsulation matrices, and they form edible films and coatings that enhance safety and extend shelf life, matching clean-label and sustainability goals. Despite strong potential, obstacles remain in scalable production, cost efficiency, structural characterization, and regulatory acceptance. This review synthesizes current evidence on links between structure and function, evaluates health benefits, and maps applications across food categories. It also outlines priorities for future work, including standardized manufacturing, robust clinical validation, and integrated process design, to realize AOS as bioactive and multifunctional ingredients in modern food systems.