The protein fraction of milk contains many valuable components and biologically active substances. Moreover, milk proteins are precursors of many different biologically active peptides which are inactive within the sequence of the precursor protein but can be released by enzymatic proteolysis. Many milk protein-derived peptides, such as caseinophosphopeptides, reveal multi-functional bioactivities. Caseinophosphopeptides can form soluble organophosphate salts and may function as carriers for different minerals, especially calcium. Furthermore, they have been shown to exert cytomodulatory effects. Cytomodulatory peptides inhibit cancer cell growth or they stimulate the activity of immunocompetent cells and neonatal intestinal cells, respectively. Several bioactive peptides derived from milk proteins are potential modulators of various regulatory processes in the body and thus may exert beneficial physiological effects. Caseinophosphopeptides are already produced on an industrial-scale and as a consequence these peptides have been considered for application as ingredients in both 'functional foods' and pharmaceutical preparations. Although the physiological significance as exogenous regulatory substances is not yet fully understood, both mineral binding and cytomodulatory peptides derived from bovine milk proteins are claimed to be health enhancing components that can be used to reduce the risk of disease or to enhance a certain physiological function.