Silkworm silk is among the most widely used natural fibers for textile and biomedical applications due to its extraordinary mechanical properties and superior biocompatibility. A number of physical and chemical processes have also been developed to reconstruct silk into various forms or to artificially produce silk-like materials. In addition to the direct use and the delicate replication of silk's natural structure and properties, there is a growing interest to introduce more new functionalities into silk while maintaining its advantageous intrinsic properties. In this review we assess various methods and their merits to produce functional silk, specifically those with color and luminescence, through post-processing steps as well as biological approaches. There is a highlight on intrinsically colored and luminescent silk produced directly from silkworms for a wide range of applications, and a discussion on the suitable molecular properties for being incorporated effectively into silk while it is being produced in the silk gland. With these understanding, a new generation of silk containing various functional materials (e.g., drugs, antibiotics and stimuli-sensitive dyes) would be produced for novel applications such as cancer therapy with controlled release feature, wound dressing with monitoring/sensing feature, tissue engineering scaffolds with antibacterial, anticoagulant or anti-inflammatory feature, and many others.