Some dietary proteins cause specific effects going beyond nutrient supply. A number of proteins seem to act directly in the intestine, such as IGFs, lactoferrin and immunoglobulins. Many substances, however, are peptides encrypted in intact molecules and are released from their encrypted position by enzymes during gastrointestinal transit or by fermentation or ripening during food processing. Among food-derived bioactive proteins and peptides from plants and animals, those obtained from milk are known in particular. Numerous effects have been described after in vitro and animal trials for bioactive proteins and peptides, such as immunomodulating, antihypertensive, osteoprotective, antilipemic, opiate, antioxidative and antimicrobial. This article reviews the current knowledge of the existence of bioactive proteins and of in vitro bioactivity and the present evidence of health effects exerted by such substances or products containing bioactive compounds. For example, there is evidence for the antihypertensive effects of milk products fermented with Lactobacillus helveticus containing the tripeptides IPP and VPP, which inhibit angiotensin converting enzyme, and for osteoprotective effects by milk basic protein. There is less profound evidence on the immunomodulating effects of lactoferrin and postprandial triglyceride reduction by a hydrolysate of bovine hemoglobin.