Wine lees, as one of the main by-products of winery wastes, is considered a rich source of bioactive compounds such as polyphenols. Recovery of such bioactive compounds would amplify the valorization of winery by-products, as well as promote their use in cosmetics and health applications. Towards this aim, the objective of this work is the recovery of phenolic compounds from wine lees by ultrasound-assisted extraction. The effect of extraction time, and ethanol content on the extraction yield of total phenolics was investigated, while the phenolic profile of the extract was monitored by GC-MS. Under the optimized conditions, the total phenolic content was calculated at 302.6 mg gallic acid equivalents g− 1 dry extract; the dry extract was investigated for its biological activities, exhibiting excellent antioxidant and antimicrobial activity. Moreover, the extract was found to be a potent inhibitor of tyrosinase, elastase, collagenase, α-glucosidase, and α-amylase with IC50 values of 53.3, 83.5, 82.7, 19.0, and 31.3 µg mL− 1, respectively. Finally, the wine lees dry extract was incorporated into chitosan films, reinforcing the properties of the films, and providing them with excellent antioxidant activity. The results support that wine lees extract exhibits high antioxidant activity and can be used as a highly efficient inhibitor of enzymes with pharmaceutical and health interest. Moreover, the chitosan film enriched with wine lees extract is a promising material with high antioxidant potential and can lead to the development of novel food packaging films in the food industry. Highlights: UAE with 70% ethanol was the most effective solvent for phenolic recovery. The extract exhibits high antioxidant activity evaluated by DPPH and ABTS assays. The antimicrobial activity of the extract was sufficient for Gram+ and Gram- strains. The extract was effective in inhibition of enzymes with cosmetic and health interest. Extract incorporation into chitosan films improved film properties. Statement of Novelty: The utilization of wine lees as starting material is of utmost importance due to their high annual production during the winemaking processes. Wine lees are rich in phenolic compounds that are well-known for their high bioactivity. Generally, winemaking by-products' extracts, such as grape pomace, grape stalks, and grape seed extracts, have been partially investigated for their antioxidant, antimicrobial, and enzyme inhibition activity. The present study demonstrated the effective extraction of phenolics from raw wine lees and the high antioxidant, antimicrobial, and enzyme inhibition potential of the extract. To the best of our knowledge, this is the first time that wine lees extract has been used for its inhibitor capacity towards α-glucosidase and α-amylase, indicating its potential in health applications. Moreover, the novelty of the present work expands to the successful incorporation of the extract into chitosan films, resulting in increased antioxidant activity and water resilience compared to the parental material. [ABSTRACT FROM AUTHOR]