This article aimed to assess the anti‐inflammatory and anticancer potential of water‐soluble peptide (WSP) extracts from buffalo and cow milk Cheddar cheeses. Anti‐inflammatory activity was evaluated on the basis of nitric oxide (NO) production in lipopolysaccharide‐stimulated macrophage (RAW‐264.7) cells. A cell viability assay, cell cycle arrest and apoptosis were performed to explore anticancer activity in a colon cancer model (HT‐29). The WSP extracts of both Cheddar cheeses effectively inhibited NO production in activated macrophages. Maximum growth inhibition was observed in the HT‐29 cells at concentrations of 400 and 500 μg/mL. A significant increase in cell population at G0/G1 phase of the cell cycle was observed. Moreover, the WSP extracts also induced extensive apoptosis in colon cancer cells.