The perspectives of Latin America as a potential producer and consumer of functional foods will depend largely on the level of information and income of the population, credibility of the products, research investments and regulatory practices. The characteristics of Latin America are diverse at the regional and sub-regional levels. However, as part of the demographic and epidemiological transition currently underway, common trends can be identified such as increasing urbanization and life expectancy, the occurrence of obesity and malnutrition, increasing incidences of chronic diseases and causes of mortality rates, all of which suggests the importance of diet and functional foods in public health policies. The Latin American population in general has no knowledge of functional foods, but in the more urbanized areas there is an increasingly health-conscious consumer, aware of the importance of food for health, due to the media and local traditions. More investment in research is important to explore the existing plant biodiversity that is a rich source of new foods and bioactive compounds, some of which are already used for health improvement and wellbeing. Clinical validation of functional foods should consider functional food science concepts and also the diverse cultural and genetic background of the local population. In Latin American scientific and regulatory communities, the functional foods concept has been associated with foods having health benefits beyond those of basic nutrition but is not defined officially in the emerging regulatory codes. Regulation existing in some countries is focused on safety and efficacy; both functional and health claims are allowed (risk reduction) provided they have scientific validation. This allowed introduction on the market of several products with health claims, some of them submitted to post-marketing surveillance.