This chapter gives a review on the biological activities encrypted within milk proteins. These bioactivities are potentially released by proteolytic enzymes during the digestion process and they have the potential to be released by enzyme hydrolysis and turned into functional food ingredients. The focus of the chapter is on the peptides that have found applications as functional ingredients in food or feed. An overview of current products based on milk derived peptides and their applications is given, the main hurdles for transforming science on bioactive peptides into products are presented, and finally gives the chapter an analysis of the recent patent applications to get a glimpse into which peptide products are on the way to the market.