In recent years, peptides derived from a variety of dietary proteins have been reported to exhibit inhibitory activity against the dipeptidyl-peptidase IV (DPP-IV) enzyme, a target in the management of type 2 diabetes. While much attention has been given to the production and identification of peptides with DPP-IV inhibitory activity from food proteins, particularly dairy proteins, little is known on the bioavailability of these molecules. In this study, the stability and transport of five previously identified milk-derived peptides (LKPTPEGDL, LPYPY, IPIQY, IPI and WR) and a whey protein isolate (WPI) digest with DPP-IV-inhibitory activity were investigated using Caco-2 cell monolayers as a model system for human intestinal absorption. Even though a small percentage (ranging from 0.05% for LPYPY to 0.47% for WR) of the bioactive peptides added to the apical side was able to cross the monolayer intact, all five peptides investigated were susceptible to peptidase action during the transport study. Conversely, only minor changes to the WPI digest composition were observed. Determination of the DPP-IV inhibitory activity of the peptides and amino acids identified in the apical and basolateral solutions showed that most degradation products were less effective at inhibiting DPP-IV than the peptide they originated from. Findings from this research suggest that the susceptibility of food-derived DPP-IV inhibitory peptides to degradation by intestinal brush border membrane enzymes may alter their biological activity in vivo. Further research should be conducted to enhance the bioavailability of DPP-IV inhibitory peptides.