Mucilage is a soluble dietary fiber used as a food additive to give foods a firmer texture, aside from its many health benefits and pharmacological properties. It is a polysaccharide in nature, composed of large molecules of sugars and uronic acid moieties. The extraction of mucilage is achieved from a wide variety of plant parts, including rhizomes, roots, and seeds, and it has also been reported from microorganisms. In this review, the nutritional and medicinal applications of mucilage are described in the context of the different mucilage types. The current article highlights state-of-the-art valorization practices relating to mucilage and its potential novel usages in the food industry and nutraceuticals, and as a prebiotic, in addition to its nutritional and anti-nutritional values. Analysis of the prebiotic action of mucilage with respect to its structure activity relationship, as well as how it modulates gut bacteria, is presented for the first time and in the context of its known health benefits inside the colon. It is recommended that more investigations are carried out to maximize the health benefits of mucilage and ensure its safety, especially upon long-term usage.