The amount of food waste generated from modern societies is increasing, which has imposed a tremendous pressure on its treatment and disposal. Food waste should be treated as a valuable resource rather than waste, and turning it into fish feeds would be a viable alternative. This paper attempts to review the feasibility of using food waste to formulate feed pellets to culture a few freshwater fish species, such as grass carp, grey mullet, and tilapia, under polyculture mode (growing different species in the same pond). These species occupy different ecological niches, with different feeding modes (i.e., herbivorous, filter feeding, etc.), and therefore all the nutrients derived from the food waste could be efficiently recycled within the ecosystem. The problems facing environmental pollution and fish contamination; the past and present situation of inland fish culture (focusing on South China); upgrade of food waste based feed pellets by adding enzymes, vitamin-mineral premix, probiotics (yeast), prebiotics, and Chinese medicinal herbs into feeds; and potential health risks of fish cultivated by food waste based pellets are discussed, citing some local examples. It can be concluded that appropriate portions of different types of food waste could satisfy basic nutritional requirements of lower trophic level fish species such as grass carp and tilapia. Upgrading the fish pellets by adding different supplements mentioned above could further elevated the quality of feeds, leading to higher growth rates, and enhanced immunity of fish. Health risk assessments based on the major environmental contaminants (mercury, PAHs and DDTs) in fish flesh showed that fish fed food waste based pellets are safer for consumption, when compared with those fed commercial feed pellets.