The increasing demand for healthy food products has promoted the use of germinated seeds to produce functional flours. In this study, germination conditions were optimized in barley grains with the aim to produce flours with high nutritional and biofunctional potential using response surface methodology (RSM). The impact of germination time (0.8–6 days) and temperature (12–20 °C) on barley quality was studied. Non-germinated barley was used as the control. The content of vitamins B1, B2 and C, and proteins increased notably after germination, especially at longer times, while levels of fat, carbohydrates, fibre, and β-glucan were reduced. Total phenolic compounds, γ-aminobutyric acid and antioxidant activity determined by Oxygen Radical Absorbance Capacity increased between 2-fold and 4-fold during sprouting, depending on germination conditions and this increase was more pronounced at higher temperatures (16–20 ◦C) and longer times (5–6 days). Procyanidin B and ferulic acid were the main phenolics in the soluble and insoluble fraction, respectively. Procyanidin B levels decreased while bound ferulic acid content increased during germination. Germinated barley flours exhibited lower brightness and a higher glycemic index than the control ones. This study shows that germination at 16 ◦C for 3.5 days was the optimum process to obtain nutritious and functional barley flours. Under these conditions, sprouts retained 87% of the initial β-glucan content, and exhibited levels of ascorbic acid, riboflavin, phenolic compounds and GABA between 1.4-fold and 2.5-fold higher than the non-sprouted grain.