Milk proteins are precursors of many different biologically active peptides. These peptides are inactive within the protein sequence, requiring enzymatic proteolysis for release of the bioactive fragment from the proteins precursor. It is evident that activated peptides originating from milk proteins should be taken into account as potential modulators of various regulatory processes in the body. Activated peptides are potential modulators of various regulatory processes in the living system: immunomodulatory peptides stimulate the activities of cells of the immune system and several cytomodulatory peptides inhibit cancer cell growth, antimicrobial peptides kill sensitive microorganisms, angiotensin-I-converting enzyme (ACE)-inhibitory peptides exert an hypotensive effect, opioid peptides are opioid receptor ligands which can modulate absorption processes in the intestinal tract, mineral binding peptides may function as carriers for different minerals, especially calcium, antithrombotic peptides inhibit fibrinogen binding to a specific receptor region on the platelet surface and inhibit aggregation of platelets. Moreover, many milk-derived peptides reveal multifunctional properties, i.e. specific peptide sequences having two or more different biological activities have been reported. Bioactive peptides can interact with target sites (e.g. receptors, enzymes) at the luminal side of the intestinal tract, or they could be absorbed and reach any potential site of action in the system to elicit physiological effects. Bioactive peptides encrypted in bovine milk proteins can be produced on an industrial-scale and are claimed to be health enhancing components for functional foods, nutraceuticals and pharmaceutical preparations that are used to reduce risk of disease or to enhance certain physiological functions.