National and international authorities and organizations, including the WHO, recommend limiting dietary consumption of added sugars. Isomalt is a well-established polyol used in food manufacturing to replace sugars. It is the only sugar-free bulk sweetener exclusively made from pure beet sugar. Due to its physical and technological properties, such as a mild, sugar-like taste and low hygroscopicity, it is an ideal sugar substitute for many foods such as confectionery or dry and soft baked goods. Furthermore, isomalt provides several nutritional benefits, including low digestibility, very low glycaemic and insulinaemic response and low physiological energy value (approximately 8.4 kJ/g). It is also non-cariogenic. This review gives an overview of the technological properties of isomalt and the latest advances in food applications. It also discusses the physiological health benefits of isomalt, with an emphasis on its low glycaemic and insulinaemic effects. These benefits have now been corroborated with a series of randomized controlled trials conducted according to international standards in blood glucose response testing for a variety of food applications. Our study confirms a reduced postprandial glycaemic and insulin response of various confectionary products in which sugar was replaced by isomalt. These findings agree with previous data and extend our knowledge by providing evidence for various sweets containing isomalt. Isomalt, with its technological advantages and nutritional benefits, is a proven versatile sugar substitute for supporting a sugar-reduced diet that combines health and indulgence at the same time.