Milk contains components that provide critical nutritive elements, immunological protection, and biologically active substances to both neonates and adults. Milk proteins are currently the main source of a range of biologically active peptides. Concentrates of these peptides are potential health-enhancing nutraceuticals for food and pharmaceutical applications. Several bioactive peptides may be used as nutraceuticals, for example, in the treatment of diarrhea, hypertension, thrombosis, dental diseases, as well as mineral malabsorption, and immunodeficiency. Minor whey proteins, such as lactoferrin, lactoperoxidase, lysozyme, and immunoglobulins, are considered antimicrobial proteins. Milk also contains some natural bioactive substances. These include oligosaccharides, fucosylated oligosaccharides, hormones, growth factors, mucin, gangliosides, and endogenous peptides, which are present in milk at secretion. Most of the claimed physiological properties of milk bioactive components have been carried out in vitro or in animal model systems, and these hypothesized properties remain to be proven in humans. Whether these milk bioactive components will replace drugs entirely in the immediate future is still unclear, but the increasing appreciation of "drug foods" or nutraceuticals plays a complementary rather than a substitutional role to the synthetic pharmacological drugs.