Bovine milk is known to contain a number of peptide fractions that can affect immune function. The vast majority of immunoregulatory peptides that have been characterised are hydrolysate derivatives of major milk proteins. Recent research has also indicated that the metabolic activity of probiotic lactic acid bacteria can generate de novo immunoregulatory peptides from milk, via enzymatic degradation of parent milk protein molecules. In contrast, relatively little is known of endogenous, preformed immunoregulatory peptides in milk that may be relevant to modulating human health. The natural in vivo role of preformed and enzymatically derived peptides is likely to be one of regulation of the neonatal (bovine) gastrointestinal tract immune system, in order to modulate immune function with respect to the development of immunocompetence and avoidance of undesirable immunological responses (e.g. tolerance, and hypersensitivity to nutrients). There is scope for the further characterisation of both the origin and function of milk-derived immunoregulatory peptides, so that their potential to influence human health can be fully appraised. This review highlights our current knowledge of milk-derived immunoregulatory peptides, and outlines areas that are of relevance for further research.