The primary function of dietary proteins is to supply the body adequately with indispensable amino acids and organic nitrogen. Little attention has been paid up to date to milk proteins, in particular caseins, that are currently the main source of biologically active peptides, although other animal as well as vegetable proteins are known to contain potentially bioactive sequences. Such regulatory peptides can be released by enzymatic proteolysis of caseins in vitro and in vivo and may act as potential physiological modulators of metabolism during the intestinal digestion of the diet. It has been proved that bioactive peptides derived from caseins, such as beta-casomorphins and phosphopeptides, can be released during gastrointestinal passage. It is also evident that peptides originating from food proteins should be taken into account as potential modulators of various regulatory processes in the body. The possible regulatory effects concern nutrient uptake (phosphopeptides, casomorphins), postprandial hormone secretion (casomorphins), immune defense (immunopeptides, casokinins, casomorphins) and neuroendocrine information transfer (casokinins). The advances in the research field of bioactive peptides are driven by a molecular understanding of biological processes, and analytical techniques are a critical component of this understanding. Different up-to-date methods, including peptide synthesis and immunochemistry, have been applied to the chemical characterization of bioactive peptides. Especially casein derived peptides have already found interesting applications, both as dietary supplements (phosphopeptides) and as pharmaceutical preparations (phosphopeptides, beta-casomorphins). The question of 'what kinds of bioactive peptides are beneficial and desirable as food constituents or as drugs' should be always carefully examined. However, the possibilities for the design of dietary products and 'natural' drugs look promising.