R-phycoerythrin prepared from red algae (Bangia fusco-purpurea) was hydrolyzed by pepsin followed by trypsin to produce angiotensin I-converting enzyme (ACE) inhibitory peptides. The IC50 of the hydrolysate of R-phycoerythrin (HRPE) was 191.1 ± 4.1 μg/mL, and the molecular weight of most products (89.9 %) was below 2 kDa. After sequential gel permeation and reversed-phase chromatography steps to purify the hydrolysate, two peptides with the sequences of ALLAGDPSVLEDR and VVGGTGPVDEWGIAGAR were obtained and their IC50 values were 57.2 ± 5.0 and 66.2 ± 4.2 μg/mL, respectively. The ALLAGDPSVLEDR and VVGGTGPVDEWGIAGAR peptides were derived from the β- and α-subunit of R-phycoerythrin from Polysiphonia urceolata, with a 92.3 % (12/13) and 94.1 % (16/17) match, respectively. Both peptides were resistant to digestion by proteinases common in the gastrointestinal tract. Therefore, the identified novel peptides derived from R-phycoerythrin may be used as potential nutraceuticals for development of functional foods.