Nutraceuticals link nutrition with medicine. They cover dietary supplements, functional foods, and medical foods. The definition of functional foods is the foods that promote health and possibly prevention and curing of certain diseases, in addition to basic nutritional supplementation. This concept is becoming popular with consumers because of a heightened awareness of the link between health and food and nutrition. Food manufacturers and pharmaceutical companies are enthusiastic about developing functional foods because their global market is growing very rapidly. In this article the authors overview the trends and current developments in the markets of functional foods, especially of USA, Europe, Japan, and Korea. The market shares of USA, Europe, and Japan cover more than 85% of the world functional food market. Dietary supplements including vitamin/minerals, herb and phytochemicals also keep growing. We expect a variety of functional foods will play an important role to promote the human health and to create new medical markets in the future.