Intermediate wheatgrass (IWG;Thinopyrum intermedium), a nutritionally dense and sustainable crop, is a promising novel ingredient in bakery applications. The main aim of this study was to investigate the potential of IWG as a novel ingredient in breadmaking. The second aim was to investigate the characteristics of breads substituted with 15, 30, 45, and 60% IWG flour compared to control bread produced using wheat flour. The gluten content and quality, bread quality, bread staling, yellow pigment, and phenolic and antioxidant properties were determined. Enrichment with IWG flours significantly affected the gluten content and quality and bread characteristics. Increased levels of IWG flour substitution significantly decreased the Zeleny sedimentation and gluten index values and increased the dry and wet gluten contents. The bread yellow pigment content and crumb b* colour value increased with the increasing level of IWG supplementation. IWG addition also had a positive effect on the phenolic and antioxidant properties. Bread with 15% IWG substitution had the highest bread volume (485 mL) and lowest firmness values (654 g-force; g-f) compared to the other breads, including the control (i.e., wheat flour bread). The results indicated that IWG has great potential to be used in bread production as a novel, healthy, and sustainable ingredient.