Japan is often credited with creating the term "functional foods" in the late 1980's. Japan is the only nation that has legally defined functional foods, and the Japanese functional food market is now one of the most advanced in the world. For those reasons, developments in Japan are often cited as indicative of possible developments in Europe and the United States.

The Japanese government instituted an approval system for functional foods in 1991.⁽⁵⁾ The new system was intended to help promote the manufacture of foods designed to remedy serious health problems such as inadequate fiber and calcium consumption within a regulatory framework that would curb misleading claims.