In fish processing, a great amount of side streams, including skin, bones, heads and viscera, is wasted or downgraded as feed on a daily basis. These side streams are rich sources of bioactive nitrogenous compounds and protein, which can be converted into peptides through enzymatic hydrolysis as well as bacterial fermentation. Peptides are short or long chains of amino acids differing in structure and molecular weight. They can be considered as biologically active as they can contribute to physiological functions in organisms with applications in the food and pharmaceutical industries. In the food industry, such bioactive peptides can be used as preservatives or antioxidants to prevent food spoilage. Furthermore, peptides contain several functional qualities that can be exploited as tools in modifying food ingredient solubility, water-holding and fat-binding capacity and gel formation. In the pharmaceutical industry, peptides can be used as antioxidants, but also as antihypertensive, anticoagulant and immunomodulatory compounds, amongst other functions. On the basis of their properties, peptides can thus be used in the development of functional foods and nutraceuticals. This review focuses on the bioactive peptides derived from seafood side streams and discusses their technological properties, biological activities and applications.