For bioactive milk peptides to be relevant to infant health, they must be released by gastrointestinal proteolysis and resist further proteolysis until they reach their site of activity. The intestinal tract is the likeliest site for most bioactivities, but it is currently unknown whether bioactive milk peptides are present therein. The purpose of the present study was to identify antimicrobial and bifidogenic peptides in the infant intestinal tract. Milk peptides were extracted from infant intestinal samples, and the activities of the bulk peptide extracts were determined by measuring growth of Escherichia coli, Staphylococcus aureus, and Bifidobacterium longum spp. infantis after incubation with serial dilutions. The peptide profiles of active and inactive samples were determined by peptidomics analysis and compared to identify candidate peptides for bioactivity testing. We extracted peptides from 29 intestinal samples collected from 16 infants. Five samples had antimicrobial activity against S. aureus and six samples had bifidogenic activity for B. infantis. We narrowed down a list of 6645 milk peptides to 11 candidate peptides for synthesis, of which 6 fully inhibited E. coli and S. aureus growth at concentrations of 2500 and 3000 µg/mL. This study provides evidence for the potential bioactivity of milk peptides in the infant intestinal tract.