This report reviews functional foods from a multidisciplinary perspective focusing on safety, legal/policy aspects, economy, public perceptions and ethics. It attempts to clarify the main issues and provides comprehensive recommendations for policymaking, especially since functional foods are being introduced into society at a particularly sensitive moment when food has become a main issue in public debates and a focal point of political activity in Europe. Diet-related diseases have assumed epidemic proportions significantly affecting the quality of life while obesity is spreading to the majority of the adult population but also to young people. These foods assume a highly targeted solution to diet-related diseases with effective reduction of risk and improved physical and mental well-being, but are still faced with a host of unresolved issues.