Bioactive peptides are specific protein fragments which, above and beyond their nutritional capabilities, have a positive impact on the body's function or condition which may ultimately influence health. Although, inactive within the sequence of the parent proteins, these peptides can be released during proteolysis or fermentation and play an important role in human health by affecting the digestive, endocrine, cardiovascular, immune and nervous systems. Several peptides that are released in vitro or in vivo from animal proteins have been attributed to different health effects, including antimicrobial properties, blood pressure-lowering (ACE inhibitory) effects, cholesterol-lowering ability, antithrombotic and antioxidant activities, opioid activities, enhancement of mineral absorption and/or bioavailability, cytomodulatory and immunomodulatory effects, antiobesity, and anti-genotoxic activity. Several functional foods based on the bioactivities of these peptides with scientifically evidenced health claims are already on the market or under development by food companies. Consumer's increasing interest in these products has given an impetus to the food industry and scientific sector who are continuously exploring the possibilities for the development of new functional products based on these peptides. In this review, we describe above stated properties of bioactive peptides of animal origin.