Biska is a traditional Istrian herbal spirit produced by maceration of the mistletoe (Viscum album) leaves and twigs in a hydro-ethanolic base, mostly grape marc brandy. The aim of this research is to define optimal maceration parameters of the mistletoe in hydro-ethanolic base with respect to ethanol content, concentration of plant material and duration of the process, to identify and quantify biologically active compounds in prepared mistletoe macerates and biska samples, to examine their functional properties (antioxidant, antimicrobial and antiproliferative), to investigate the stability of biologically active compounds during in vitro gastrointestinal digestion and to determine the physico-chemical parameters of the samples (pH value, content of total acids and total extract, chromatic parameters and aroma compounds profile). The obtained results and derived conclusions confirmed the research hypothesis that the traditional Istrian herbal spirit biska contains biologically active compounds of mistletoe (phenolic acids, flavonoids and coumarins) responsible for the functional properties of biska. The content of phenolic compounds in the samples depends on the tested maceration parameters, where the mass concentration of the plant material and the maceration time have a statistically significant influence. Of the tested functional properties, the samples showed significant antioxidant and antiproliferative activity, while the antimicrobial activity against the selected test microorganisms is negligible. The physicochemical parameters of the samples are the result of the production process: the quality and quantity of the plant material, the quality of the hydro-ethanolic base, and the maceration process parameters. By applying the optimal maceration parameters which resulted in the highest content of biologically active compounds (80 g Lˉ¹ mistletoe, 55 % v/v hydro-ethanolic base and 3 weeks maceration duration), it is possible to improve the production process in order to produce biska with better functional properties. Additionally, that will contribute to the valorization of biska as a traditional, autochthonous product.