As demand for natural, food-based health programs increases, the scientific interest in nutraceuticals and functional foods from medicinal plants has gained momentum. Bacopa monnieri (L.) Wettst. or Brahmi is an ancient Ayurvedic herb that is well known for its cognitive-boosting and neuro-protective properties. With its esteemed phytochemical content and wide-ranging health advantages, Brahmi has become a preferred choice for nutraceutical ingredient in food systems in recent years. This review critically synthesizes the current scientific evidence regarding phytochemical composition, nutraceutical properties and functional-food applications of B. monnieri. Its bioactive components such as bacosides, alkaloids, flavonoids, phenolic acids, saponins and their antioxidant, anti-inflammatory, neuroprotective, metabolic and immunomodulatory properties are especially highlighted. Technological issues related to functional foods are also discussed, such as formulation methods, stability during processing, sensory challenges, enhancement of bioavailability, and emerging technologies, like microencapsulation and nano-formulations containing Brahmi. The safety, toxicity, and regulatory aspects of the use of Brahmi in nutraceuticals in various countries are also included. The potential is great, but there are issues to address regarding standardisation, clinical validation and efficacy studies on food. In conclusion, B. monnieri is a valuable, sustainable and multifunctional nutraceutical ingredient that holds potential applications in the development of functional foods for cognitive health and overall well-being.