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This paper presented the initial investigation into the impact of Penicillium polonicumfermentation on the functional components and bioactivities of navel orange peel. The fermentation process resulted in a notable enhancement of the total flavonoid content (TFC), total phenolic content (TPC), antioxidant capacity, antibacterial activity, and antiglycation activity of orange peel. Eighteen flavonoids were isolated and identified from the ethanolic extract of fermented orange peel (FEE) by employing chromatographic and spectroscopic techniques. The results of the HPLC analysis showed that three flavanones (naringenin, hesperetin, and isosakuranetin) were newly produced and present in high concentrations in FEE, with hesperetin being the most abundant component (39.74 mg/g) in comparison to the ethanolic extract of unfermented orange peel (EE). The TPC, TFC, antioxidant, and antiglycation activities of FEE, as well as the enzymatic activity of β-glucosidase in the fermented orange peels, showed a gradual increase with the progression of fermentation time over a five-month period. HPLC analysis revealed that the fermentation metabolites generated by P. polonicumin rice and orange peel media exhibited distinct profiles, indicating that the fermentation of orange peel by P. polonicumdid not result in the production of potential mycotoxins. The findings of this study provided a scientific basis for the high-value utilization of navel orange peels and established a reference point for the potential applications of other peel byproducts via microbial fermentation.