Instant flavor peanut powder is a nutritional additive that can be added to foods to impart nutritional value and functional properties. Sensory acceptability is the premise of its development. Flavor is the most critical factor in sensory evaluation. The heat treatment involved in peanut processing is the main way to produce flavor substances and involves chemical reactions: Maillard reaction, caramelization reaction, and lipid oxidation reaction. Peanut is rich in protein, fat, amino acids, fatty acids, and unsaturated fatty acids, which participate in these reactions as volatile precursors. N-heterocyclic compounds, such as the pyrazine, are considered to be the key odorants of the "baking aroma". However, heat treatment also affects the functional properties of peanut protein (especially solubility) and changes the nutritional value of the final product. In contrast, functional properties affect the behavior of proteins during processing and storage. Peanut protein modification is the current research hotspot in the field of deep processing of plant protein, which is an effective method to solve the protein denaturation caused by heat treatment. The review briefly describes the characterization and mechanism of peanut flavor during heat treatment combined with solubilization modification technology, proposing the possibility of using peanut meal as material to produce IFPP.