Microorganisms are found throughout nature, thriving in a vast range of environmental conditions. The majority of them are unculturable or difficult to culture by traditional methods. Metagenomics enables the study of all microorganisms, regardless of whether they can be cultured or not, through the analysis of genomic data obtained directly from an environmental sample, providing knowledge of the species present, and allowing the extraction of information regarding the functionality of microbial communities in their natural habitat. Function-based screenings, following the cloning and expression of metagenomic DNA in a heterologous host, can be applied to the discovery of novel proteins of industrial interest encoded by the genes of previously inaccessible microorganisms. Functional metagenomics has considerable potential in the food and pharmaceutical industries, where it can, for instance, aid (i) the identification of enzymes with desirable technological properties, capable of catalyzing novel reactions or replacing existing chemically synthesized catalysts which may be difficult or expensive to produce, and able to work under a wide range of environmental conditions encountered in food and pharmaceutical processing cycles including extreme conditions of temperature, pH, osmolarity, etc; (ii) the discovery of novel bioactives including antimicrobials active against microorganisms of concern both in food and medical settings; (iii) the investigation of industrial and societal issues such as antibiotic resistance development. This review article summarizes the state-of-the-art functional metagenomic methods available and discusses the potential of functional metagenomic approaches to mine as yet unexplored environments to discover novel genes with biotechnological application in the food and pharmaceutical industries.