Buckwheat originated in North or East Asia and is widely adapted in North America. It has been grown since at least 1000 BC in China. It has very strong adaptability to adverse environments with a very short growing span. Many varieties are growing around the world, but mainly in the north hemisphere. Currently the most common buckwheat spice is Fagopyrum esculentum Moench (common buckwheat or sweet buckwheat), while Fagopyrum tartaricum is also available in some mountainous regions. Many nutraceutical compounds exist in buckwheat seeds and other tissues. Buckwheat has been used and will be better used as an important raw material for functional food production. In this review we focus on works related to the development of functional foods from common buckwheat, Fagopyrum esculentum Moench. A lot of research has be conducted in the functionalities and properties of buckwheat proteins, flavonoids, flavones, phytosterols, thiamin-binding proteins, and other rare compounds in buckwheat seeds. Buckwheat proteins have unique amino acid composition with special biological activities of cholesterol-lowering effects, antihypertensition effects, and improving the constipation and obisity conditions by acting similar as to dietary fiber and interrupting the in vivo metabolisms. The trypsin inhibitors isolated from buckwheat seeds are heat stable and can cause poor digestion if they are not suitably cooked before consumption. The allergenic proteins existing in the buckwheat seeds and their derivatives were reviewed with respect to their chemical and biochemical characteristics as well as the physiological reactions after digestion. Some possible mechanisms involved in these effects are discussed in this review. Experiments, both with animal models and with human beings, revealed that buckwheat flour can improve diabetes, obesity, hypertension, hypercholesterolemia and constipation. Methods to exploit buckwheat seeds and flour to produce highly effective nutraceuticals are also reviewed.