This study investigated the health-promoting effects and prebiotic functions of mango peel powder (MPP) both as a plain individual ingredient and when incorporated in yoghurt during simulated digestion and fermentation. The treatments included plain MPP, plain yoghurt (YA), yoghurt fortified with MPP (YB), and yoghurt fortified with MPP and lactic acid bacteria (YC), along with a blank (BL). The identification of polyphenols in the extracts of insoluble digesta and phenolic metabolites after the in vitro colonic fermentation were performed employing LC-ESI-QTOF-MS2. These extracts were also subjected to pH, microbial count, production of SCFA, and 16S rRNA analyses. The characterisation of phenolic profiles identified 62 phenolic compounds. Among these compounds, phenolic acids were the major compounds that underwent biotransformation via catabolic pathways such as ring fission, decarboxylation, and dehydroxylation. Changes in pH indicated that YC and MPP reduced the media pH from 6.27 and 6.33 to 4.50 and 4.53, respectively. This decline in pH was associated with significant increases in the LAB counts of these samples. TheBifidobacteriacounts were 8.11 ± 0.89 and 8.02 ± 1.01 log CFU/g in YC and MPP, respectively, after 72 h of colonic fermentation. Results also showed that the presence of MPP imparted significant variations in the contents and profiles of individual short chain fatty acids (SCFA) with more predominant production of most SCFA in the MPP and YC treatments. The 16s rRNA sequencing data indicated a highly distinctive microbial population associated with YC in terms of relative abundance. These findings suggested MPP as a promising ingredient for utilisation in functional food formulations aiming to enhance gut health.