Upcycled foods contain unmarketable ingredients (e.g., damaged food produce, by-products and scraps from food preparation) that otherwise would not be directed for human consumption. Upcycled food is a new food category and thus faces several challenges, such as definition development, inclusion in the food waste management hierarchy and public acceptability. This review provides an overview of these three challenges. The upcycled food definitions have been developed for research, food manufacturers, and multi-stakeholders use. Thus, there is a need for a consumer-friendly definition for the general public. A simplified definition is proposed to introduce these foods as environmentally friendly foods containing safe ingredients that otherwise would not have gone to human consumption such as damaged food produce, by-products and scraps from food preparation. Moreover, an updated version of the food waste management hierarchy has been proposed by including the production of upcycled foods as a separate waste management action that is less preferable than redistribution but more favourable than producing animal feed. Furthermore, consumer sociodemographic characteristics and beliefs, as well as food quality cues and attributes, were identified as crucial factors for the public acceptability of these foods. Future research should address these challenges to facilitate the introduction of upcycled foods.