Pomegranate peel rich in phenolics, and pomegranate seed which contain a conjugated fatty acid namely punicic acid in lipid fraction remain as by-products after processing the fruit into juice. Ice cream is poor in polyunsaturated fatty acids and phenolics, therefore, this study was conducted to improve the functional properties of ice cream by incorporating pomegranate peel phenolics and pomegranate seed oil. Incorporation of the peel phenolics into ice cream at the levels of 0.1% and 0.4% (w/w) resulted in significant changes in the pH, total acidity, and color of the samples. The most prominent outcomes of phenolic incorporation were sharp improvements in antioxidant and antidiabetic activities as well as the phenolic content of ice creams. Replacement of pomegranate seed oil by milk fat at the levels of 2.0% and 4.0% (w/w) increased the conjugated fatty acid content. However, perception of oxidized flavor increased with the additional seed oil. When one considers the functional and nutritional improvements in the enrichment of the ice cream together with overall acceptability results of the sensory analysis, then it follows from this study that ice creams enriched with pomegranate peel phenolics up to 0.4% (w/w) and pomegranate seed oil up to 2.0% (w/w) could be introduced to markets as functional ice cream. Enrichment of ice creams with pomegranate by-products might provide consumers health benefits with striking functional properties of punicalagins in pomegranate peel, and punicic acid in pomegranate seed oil.