Tryptophan (W) is an essential amino acid which is primarily required for protein synthesis. It also acts as a precursor of key biomolecules for human health (serotonin, melatonin, tryptamine, niacin, nicotinamide adenine dinucleotide (NAD), phosphorylated NAD (NADP), quinolinic acid, kynureric acid, etc.). Among dietary proteins, milk proteins are particularly rich in W. W residues within milk proteins may be released by proteolytic/peptidolytic enzymes either as a free amino acid or as part of peptide sequences. Different W-containing peptides originating from milk proteins have been shown in vitro to display a wide range of bioactivities such as angiotensin converting enzyme (ACE) inhibition along with antioxidant, antidiabetic and satiating related properties. Free W has been shown in certain instances to have an effect on cognition and the aforementioned bioactive properties. However, a higher bioactive potency has generally been observed with specific W-containing peptides compared to free W. Since W is thermolabile, the impact of processing on the stability of W-containing peptides needs to be considered. Milk protein-derived W-containing peptides may have significant potential as natural health promoting agents in humans.