The present investigation examined the effects of supplementation of milk peptide fractions produced by enzymatic hydrolysis on the fermentation of reconstituted skim milk (RSM). Changes in pH, cell growth, proteolytic activity, and angiotensin-converting enzyme (ACE)-inhibitory activity were monitored during fermentation of RSM by pure cultures of Lactobacillus acidophilus, Lactobacillus helveticus, Lactobacillus delbrueckii ssp. bulgaricus, and Streptococcus thermophilus. The study showed that supplementation with peptide fractions of different molecular weights did not significantly affect the bacterial growth in RSM. All bacteria showed an increased proteolytic activity in RSM supplemented with large peptides (>10 kDa), and L. helveticus in general exhibited the highest proteolytic activity among the bacteria studied. The ACE-inhibitory activity was observed to be the maximum in RSM supplemented with larger peptides (>10 kDa) for all bacteria. The results suggest that proteolysis by bacteria leads to increased production of ACE-inhibitory peptides compared to the supplemented peptides produced by enzymatic hydrolysis.