β-glucan derived from cereal sources are high in soluble dietary fiber and can be used as thickeners, texture enhancers, stabilizers, and fat substitutes in foods. Due to its pronounced viscosity, β-glucan has physiological activity in the body, such as decreasing the glycemic index of foods and reducing the incidence of cardiovascular disease in people. This review focuses on the characteristics of cereal β-glucans, extraction methods, and causes of degradation, while presenting the most relevant and recent applications in foods. Today, there is an abundant amount of information regarding extraction and characterization of β-glucans. However, studies on the degradation and application of fiber are more recent and warrant review. The incorporation of β-glucan has worked well in high carbohydrate foods (e.g., pasta and snacks), but there are still challenges with its inclusion in protein-rich foods (e.g., dairy and meat products). After a comprehensive search and an objective point of view of these aspects, the primary challenges with the incorporation of β-glucan in foods are the inclusion of sufficient amounts of dietary fiber to have a significant nutritional contribution, the combination with other ingredients and other components of the food (evaluated synergistically or antagonistically), and the new incorporation of β-glucan in foods without their degradation during processing.