The search for bioactive components for the development of functional foods and nutraceuticals has received tremendous attention. This is due to the increasing awareness of their therapeutic potentials, such as antioxidant, anti‐inflammatory, antihypertensive, anti‐cancer properties, etc. Food proteins, well known for their nutritional importance and their roles in growth and development, are also sources of peptide sequences with bioactive properties and physiological implications. Cereal and legume grains are important staples that are processed and consumed in various forms worldwide. However, they have received little attention compared to other foods. This review therefore is geared towards surveying the literature for an appraisal of research conducted on bioactive peptides in cereal and legume grains in order to identify what the knowledge gaps are. Studies on bioactive peptides from cereal and legume grains are still quite limited when compared to other food items and most of the research already carried out have been done without identifying the sequence of the bioactive peptides. However, the reports on the antioxidative, anticancer/inflammatory, antihypertensive, antidiabetic properties show there is much prospect of obtaining potent bioactive peptides from cereal and legume grains which could be utilized in the development of functional foods and nutraceuticals.