Animal by-products (ABPs), such as processed animal proteins, animal fats, milk and egg products, and former food products represent a potentially valuable resource for feeding livestock. According to Europe’s authorities, around 18 million t of animal fat and meat industry by-products arise annually in the European Union (EU) from slaughterhouses, dairies and plants producing food for human consumption. Another 8 to 12 million t emerge every year as former foodstuffs. Recycling of slaughter by-products and other animal products, sometimes considered as waste materials, into animal feed can bring major benefits to the economics of livestock production and the environment in the EU. Nevertheless, improper and unregulated use of ABPs and food waste, as could be noticed from a number of food crises in the recent past, have a strong public health and economic impact. For a safety reasons most ABP materials have been subject to severe restrictions in their use for feed farm animals in the EU. However, due to the decreasing risk of transmissible spongiform encephalopathies, important positive changes of animal by-product processing industry in Europe and developing validated diagnostic methods to test for species-specific material in feed, the European Commission started to reform these stringent rules, thus non-ruminant processed animal proteins has been authorized in aqua feed starting from 1 June 2013. The aim of this review was to describe the status of ABPs in the feed industry, to identify new opportunities, and to place these residue materials in the framework of the EU legislation for safety.