Betaine is a non-essential amino acid with proven functional properties and underutilized potential. The most common dietary sources of betaine are beets, spinach, and whole grains. Whole grains—such as quinoa, wheat and oat brans, brown rice, barley, etc.—are generally considered rich sources of betaine. This valuable compound has gained popularity as an ingredient in novel and functional foods due to the demonstrated health benefits that it may provide. This review study will provide an overview of the various natural sources of betaine, including different types of food products, and explore the potential of betaine as an innovative functional ingredient. It will thoroughly discuss its metabolic pathways and physiology, disease-preventing and health-promoting properties, and further highlight the extraction procedures and detection methods in different matrices. In addition, gaps in the existing scientific literature will be emphasized.