Compared to seeds and mature plants, sprouts are well characterized based on their nutritive values and biological properties. Moreover, laser light application is known to be a promising approach to improving plant growth, photosynthesis, and nutraceutical values. However, no studies have investigated the phytochemicals and biological activity of lemongrass (Cymbopogon proximus (Hochst. ex A.Rich.) Chiov.) sprouts or the further improvement of their quality by applying laser light treatment. We carried out a preliminary experiment for the optimization of laser treatment conditions, finding that a helium neon (He–Ne) laser at 632 nm and 5 mW for 5 min provided the most favorable conditions. We then investigated fresh weight, photosynthetic reactions, and primary and secondary metabolites, including sugars, amino acids, organic acids, essential oils, and phenolic compounds. Moreover, we studied the effect of laser light-induced changes in chemical compositions on the antioxidant, anti-diabetic, and anti-cholesterol activities of Cymbopogon proximus sprouts grown from laser-treated seeds. Laser light treatment increased the photosynthesis and respiration and hence the fresh weight of Cymbopogon proximus sprouts. Overall, sprouting increased most bioactive primary and secondary metabolites as compared to seeds. Increased photosynthesis by laser light improved carbon allocation and raised non-structural carbohydrates, which in turn led to improved synthesis of amino acids, organic acids, and essential oils, as well as phenolic and flavonoid compounds. As a result, laser light significantly improved the antioxidant capacity in terms of increasing the levels of ferric reducing antioxidant power (FRAP) (from 9.5 to 21 µmole trolox/g fresh weight (FW)), oxygen radical absorbance (ORAC) (from 400 to 1100 µmole trolox/100 g FW), and DPPH (from 5% to 25% of inhibation) and enhanced the hypocholesterolemic and antidiabetic activity through increasing the percentage of cholesterol micellar solubility (CMS) inhibition (from 42% to 62%) and glycemic index (from 33 to 17 µmole/g) over sprouts and seeds. In conclusion, the synergism of seed laser treatment and sprouting induced the health-promoting bioactive compounds in Cymbopogon proximus as compared to seeds, which can be applied at a large scale to improve the biochemical, physiological, and nutraceutical values of medicinal and crop sprouts.