Intestinal health challenges – including dysbiosis, inflammatory disorders, and pathogen susceptibility – impose severe economic losses and welfare concerns in intensive livestock production. Functional lipids, defined as bioactive lipid molecules with physiological benefits beyond basic nutrition, offer promising solutions to these issues. This review establishes a comprehensive definition of functional lipids and elucidates their metabolic process. Using short- and medium-chain fatty acid glycerides as a prime example, we examine their significant roles in energy homeostasis, gut microbiota composition and diversity, immune modulation, and antibacterial and antiviral activities. Additionally, we critically evaluate their current applications and future industrial potential in livestock production, providing evidence-based recommendations for their optimal implementation in animal nutrition strategies.