Abstract Dietary fiber (DF) plays a vital role in promoting human health and has garnered increasing attention for its potential application in functional foods. In this study, three extraction techniques—water extraction (W), wet ball milling (WBM), and water-homogenization (WH) were employed to isolate DF from kiwi berry. The resulting DF fractions (W-DF, WBM-DF, and WH-DF) were systematically evaluated for their physicochemical, structural, rheological, hydration, and functional properties. Among the methods, WH extraction yielded the highest DF content. Fourier Transform Infrared (FTIR) spectroscopy confirmed that WH treatment disrupted the crystalline structure and hydrogen bonding network of the fiber, producing a rougher, more porous morphology. WH-DF also exhibited the smallest particle size and lowest molecular weight, alongside superior thermal stability and viscosity compared with W-DF and WBM-DF. Additionally, WH-DF showed the highest absolute zeta potential, indicating excellent dispersion stability. Notably, oil and water holding capacities increased by 37.51% and 48.74%, respectively, after the WH treatment. Functional evaluations revealed that WH-DF had significantly enhanced glucose, bile acid, and nitrite ion adsorption capacities, implying potential health-promoting effects. The improved functional properties of WH-DF suggest strong potential for its application as a functional ingredient. These findings highlight the utility of WH-extracted kiwi berry DF in the formulation of value-added food products aimed at improving nutritional quality, texture, and health benefits.