Lactoferricin is a 25-amino acid antimicrobial peptide fragment that is liberated by pepsin digestion of lactoferrin present in bovine milk. Along with its antibacterial properties, lactoferricin has also been reported to have immunostimulatory, antiviral, and anticarcinogenic effects. These attributes provide lactoferricin and other natural bioactive peptides with the potential to be functional food ingredients that can be used by the food industry in a variety of applications. At present, commercial uses of these types of compounds are limited by the scarcity of information on their ability to survive food processing environments. We have monitored the degradation of lactoferricin during its incubation with two types of lactic acid bacteria used in the yogurt-making industry, Streptococcus thermophilus and Lactobacillus delbrueckii ssp. bulgaricus, with the aim of assessing the stability of this milk protein-derived peptide under simulated yogurt-making conditions. Analysis of the hydrolysis products isolated from these experiments indicates degradation of this peptide near neutral pH by lactic acid bacteria-associated peptidases, the extent of which was influenced by the bacterial strain used. However, the data also showed that compared to other milk-derived bioactive peptides that undergo complete degradation under these conditions, the 25-amino acid lactoferricin is apparently more resistant, with approximately 50% of the starting material remaining after 4 h of incubation. These findings imply that lactoferricin, as a natural milk protein-derived peptide, has potential applications in the commercial production of yogurt-like fermented dairy products as a multi-functional food ingredient.