As interest in the ability of functional foods to impact on human health has grown over the past decade, so has the volume of knowledge detailing the beneficial roles of food-derived bioactive peptides. Bioactive peptides from both plant and animal proteins have been discovered, with to date, by far the most being isolated from milk-based products. A wide range of activities has been described, including antimicrobial and antifungal properties, blood pressure-lowering effects, cholesterol-lowering ability, antithrombotic effects, enhancement of mineral absorption, immunomodulatory effects, and localized effects on the gut. Although there is still considerable research to be performed in the area of food-derived bioactive peptides, it is clear that the generation of bioactive peptides from dietary proteins during the normal digestive process is of importance. Therefore, it will become necessary when determining dietary protein quality to consider the potential effects of latent bioactive peptides that are released during digestion of the protein.