GABA (γ-aminobutyric acid) is a nonprotein amino acid and naturally occurs in microorganisms, plants, and animals. GABA is synthesized prominently via GABA shunt. From Krebs cycle, glucose metabolized with α-ketoglutarate and transaminated by α-oxoglutarate transaminase (GABA-T) to form glutamate. Further, glutamate is decarboxylated by glutamate decarboxylase (GAD) to form GABA. In mammalian central nervous system, GABA is present in about 25%–50% of neurons as a chief inhibitory neurotransmitter. GABA inhibitory synapses bind to specific transmembrane receptors in the plasma membrane of both pre- and postsynaptic neuronal processes. GABAA and GABAC receptors are ionotropic, activation of these receptors results in enhanced membrane ion conductance, whereas GABAB receptor is metabotropic, activation of GABAB results in increased intracellular levels of second messenger. GABA plays an important role in regulating the neuronal excitability throughout the nervous system and has several well-known physiological functions. GABA improves plasma concentration, growth hormones, and protein synthesis in the brain. The lower GABA content is associated with several psychiatric and neurological disorders, including anxiety, pain, depression, insomnia, and epilepsy. Also GABA having hypotensive, tranquilizing, diuretic, and antidiabetic effects, it regulates lipid levels in serum, inhibits cancer cell proliferation, and improves memory and the learning abilities. Along with GABA shunt, GABA synthesized through polyamine pathway as well. GABA also acts as an osmolyte in response to a range of stresses such as, mechanical, stimulation, hypoxia, cytosolic acidification, water, darkness, drought, and salt stress. Due to beneficial effects of GABA for human health, demand of GABA has increased, nowadays; it is classified as a bioactive component and used considerably in foods and pharmaceuticals. The synthetic GABA have significant side effects like drowsiness and dizziness to addiction, whereas natural GABA supplementation is nearly without side effects. Various traditional foods produced through microbial fermentation having GABA content are safe and eco-friendly. The production of GABA by living organisms (plants and microorganisms) can fulfill the demand with GABA-enriched health beneficial foods. In this chapter, general account of GABA, biosynthesis at biochemical and molecular level in microorganisms, plants, and animals along with its further metabolism in different living system, health benefits and commercial production are discussed in detail. The applications, benefits, and side effects of GABA and GABA supplements have also been discussed in details.