Taro (Colocasia esculenta) is an important source of carbohydrates as an energy source and is used as a staple food throughout the world. It is rich in mucilage and starch granules, making it a highly digestible ingredient. Mucilage can act as a matrix and a thickening, binding, emulsifying, or foaming agent in food, pharmaceutical, and several other fields of research. Moreover, mucilage can be extracted from several living organisms and has excellent functional properties, such as water-holding, oil-holding, and swelling capacities. Therefore, these remarkable functional properties make mucilage a promising ingredient with possible industrial applications. Furthermore, several extraction techniques, including enzyme-assisted, ultrasonication, microwave-assisted, aquatic, and solvent extraction methods, are used to obtain quantitative amounts of taro mucilage. Coldwater extraction with ethanol precipitation can be considered an effective and cost-effective technique to obtain high-quality mucilage with suitable industrial applications, whereas the ultrasonication method is more expensive but results in a higher amount of mucilage than other emerging techniques. Mucilage can also be used as a fat replacer or reducer, dye remover, coating agent, and antioxidating agent. Therefore, in this review, we detail the key properties related to the extraction techniques, chemical composition, and characterization of taro mucilage, along with its suitable applications and health benefits.