Referee: Mr. Dick Fitzgerald, Ph.D., Life Science Department, University of Limerick, Limerick, IrelandAfter a brief description of the properties of bioactive peptides, the proteolytic activation of the bioactive sequences from milk protein precursors is discussed. The ability of proteolytic enzymes from various sources, especially from lactic acid bacteria, to release bioactive peptides and the physiological and biotechnological significance of these peptides in dairy products are reviewed.