A growing concern about environmental issues like depletion of fossil resources, green-house gas (GHG) emissions, and large-scale polymeric waste has driven efforts toward the development of new methods to produce polymers using renewable sources. As a result, vegetable oils have been identified as an attractive feedstock due to their availability, chemical structure variety, relatively low volatility and presence of reactive functional groups. The carbon-carbon double bond found in each molecule of the triglycerides which make up vegetable oil; ester groups present on both ends of the fatty acid chains; and in some cases, hydroxyl (-OH) groups located at either or both ends of the fatty acid chain of the glycerol backbone can all undergo various chemical transformations to create polymerizable and/or crosslinkable functionality. This article provides a comprehensive overview of recent developments in the synthesis, functionalization, characteristics and industrial application of functional polymers based on vegetable oils. Modification techniques used to modify vegetable oils include epoxidation, hydroxylation, acrylation/methacrylation, carbonatation, maleination, transesterification/urethanization. Each of these vegetable oil-derived polymer families including epoxy, polyurethane, non-isocyanate polyurethane, polyester, polyamide, acrylates and thermosets will be covered along with additional focus placed upon novel functional systems including UV curable, waterborne, self-healing, dynamic covalent/vitrimeric polymers. In addition to reviewing the use of these functional polymer systems in several industrial areas (i.e., protective coatings/adhesives/composites/auto parts/packaging), we will discuss current challenges facing this technology including variability in raw material composition, lack of efficient functionalization methodologies to yield acceptable levels of mechanically and thermally stable polymers, economics/scalability issues/end-of-life management issues. Finally, we will provide suggestions regarding potential solutions to address many of the above-mentioned challenges by focusing on waste vegetable oils, multifunctional renewable monomers, dynamic polymer networks/nanocomposite systems/sustainable processing.