Food waste management plays a vital role in source minimization and by-product recovery in the food industries. In the present research, defatted peanut flour (DPF) of indigenous varieties i.e. Golden and BARI-2011 was used for the extraction of proteins through isoelectric precipitation. The results showed that the protein content ranged from 26.17±0.56% to 27.42±0.61% in GOLDEN and BARI 2011 respectively. The protein isolate recovery was 27.573±0.49% and 29.057±0.30% while protein yield was found to be 79.047±1.95% and 86.840±3.52% respectively for both peanut varieties. Results regarding the functional properties i.e. bulk density, oil & water absorption capacity, foaming & emulsion properties revealed that the values increased by the addition of protein isolates. In the nutshell, protein isolates obtained from defatted peanut flour hold the potential to enrich various baked products. Such protein enriched products can be further utilized to control the menace of protein energy malnutrition in developing economies likes Pakistan.