Onion skin waste (OSW), which is produced from processed onions, is a major industrial waste. We evaluated the use of OSW for biosugar and quercetin production. The carbohydrate content of OSW was analyzed, and the optimal conversion conditions were evaluated by varying enzyme mixtures and loading volumes for biosugar production and quercetin extraction. The enzymatic conversion rate of OSW to biosugar was 98.5% at 0.72 mg of cellulase, 0.16 mg of pectinase, and 1.0 mg of xylanase per gram of dry OSW. Quercetin extraction also increased by 1.61-fold after complete enzymatic hydrolysis. In addition, the newly developed nano-matrix (terpyridine-immobilized silica-coated magnetic nanoparticles–zinc (TSMNP–Zn matrix) was utilized to separate quercetin from OSW extracts. The nano-matrix facilitated easy separation and purification of quercetin. Using the TSMNP–Zn matrix the quercetin was approximately 90% absorbed. In addition, the recovery yield of quercetin was approximately 75% after treatment with ethylenediaminetetraacetic acid.