This study was aimed at preparation of wheat breads supplemented with papaya seed (PS) with addition levels varying from 1 to 7%, and effects of supplementation on physicochemical properties, phenolic compounds, absorption capacities, in vitro starch digestibility and sensory attributes were evaluated. Overall, PS supplementation levels from 1 to 7% had improved nutritional components, bioactive compounds, antioxidant activities and NO2−ion, cholesterol and bile acid absorption capacities of supplemented breads. Moreover, PS supplementation showed concentration-dependent decreases in glucose release response during various in vitro starch digestion intervals. Overall, 3% PS-supplemented breads exhibited better scores for sensory attributes with excellent overall acceptability. Hence, PS-supplemented breads up to 3% addition level could be utilized as convenience food and vehicle of improved nutritional status with health beneficial bioactive compounds. Moreover, supplementation of papaya-derived PS led to improvement of functional properties of breads as valuable source of bioactive compounds and functional properties.