Collagen, the primary fibrillar protein found in marine organisms has gained significant attention due to its nutritional and functional properties. It plays a crucial role in food quality and textural attributes, making it a valuable ingredient in various food applications. This study focuses on the interactions of marine-derived collagen and its gelatin derivatives with small bioactive molecules, including phenolic compounds, polysaccharides, and others, which are briefly discussed. These interactions are governed by mechanisms such as hydrogen bonding, electrostatic forces, hydrophobic interactions, and van der Waals contacts, resulting in the formation of bio-composites with enhanced stability, bioavailability, and functionality. This article also highlights recent advancements in extraction methods, physicochemical characterization, and the role of collagen-based composites in food applications, such as emulsification, stabilization, and microencapsulation. Furthermore, this review also summarizes the challenges related to the lower thermal stability of marine collagen compared to mammalian sources, along with potential solutions through innovative processing techniques. Finally, the article briefly discusses how marine collagen-based bio-composites offer promising prospects for developing functional and sustainable food products.