Peptides regulate many physiological processes, acting at some sites as endocrine or paracrine signals and at others as neurotransmitters or growth factors, for instance. These molecules represent a major evolution in medical and industrial fields, as it is becoming mandatory to design and exploit molecules that do not necessarily fit the description of classical drug classes. The list of peptides with potential biomedical applications is huge and is growing each year. These biomedical applications range from uses as drugs to flavor-active peptides as ingredients in natural health products, nutraceuticals and functional foods. Among the peptide family, dipeptides and tripeptides are very appealing for drug discovery and development because of their cost-effectiveness, possibility of oral administration, and simplicity to perform molecular structural and quantitative structure-activity studies. Our objective is to review different actual and future uses of dipeptides and tripeptides as well as the major advances and obstacles in this growing area.