In the industrialized world, functional foods have become a part of an everyday diet and are demonstrated to offer potential health benefits beyond the widely accepted nutritional effects. Currently, the most important and frequently used functional food compounds are probiotics and prebiotics, or they are collectively known as ‘synbiotics’. Moreover, with an already healthy image, dairy products appear to be an excellent mean for inventing nutritious foods. Such probiotic dairy foods beneficially affect the host by improving survival and implantation of live microbial dietary supplements in the gastrointestinal flora, by selectively stimulating the growth or activating the catabolism of one or a limited number of health-promoting bacteria in the intestinal tract, and by improving the gastrointestinal tract's microbial balance. Hence, the paper reviews the current scenario of probiotics and their prospective potential applications for functional foods for better health and nutrition of the society.