Milk proteins are precursors of many different biologically active peptides. These peptides are inactive within the sequence of the precursor proteins but can be released by enzymatic proteolysis. It is evident that bioactive peptide fragments originating from milk proteins should be taken into account as potential modulators of various regulatory processes in the body. Although the structure-activity relationships of many bioactive peptides have not yet been fully established, peptides with a defined bioactivity show common structural features. Moreover, many milk-derived peptides reveal multifunctional bioactivities. Milk-derived peptides include a variety of substances. For example, opioid peptides are opioid receptor ligands with agonistic or antagonistic activities. Angiotensin-converting-enzyme (ACE)-inhibitory peptides can exert an antihypertensive effect. Immunomodulating casein peptides stimulate proliferation of human lymphocytes and phagocytic activities of macrophages. Antimicrobial peptides kill sensitive microorganisms. Antithrombotic peptides inhibit fibrinogen binding to a specific receptor region on the platelet surface and also inhibit aggregation of platelets. Caseinophosphopeptides can form soluble organophosphate salts and may function as carriers for different minerals, especially calcium. In relation to their mode of action, bioactive peptides may reach target sites (e.g., receptors and enzymes) at the luminal side of the intestinal tract or, after absorption, in peripheral organs. Milk-derived peptides can be produced on an industrial-scale, and as a consequence, these peptides have already been considered for application both as dietary supplements in 'functional foods' and as drugs. Hence, these peptides are claimed to be health enhancing nutraceuticals for food and pharmaceutical preparations. (C) 1997 Elsevier Science B.V.