Today, due to immobility, improper food habits, and changes in lifestyle, communities are faced with an increase in health problems such as blood pressure, cholesterol, diabetes, and thrombosis. Bioactive peptides are considered as being the main products of protein hydrolysis which exert high effects on the nervous, immune, and gastrointestinal systems. Unlike synthetic drugs, bioactive peptides have no side effects and this advantage has qualified them as an alternative to such drugs. Due to the above-mentioned properties, this paper focuses on the study of health-improving attributes of bioactive peptides such as anti-oxidative, anti-hypertensive, immunomodulatory, anti-microbial, anti-allergenic, opioid, anti-thrombotic, mineral-binding, anti-inflammatory, hypocholesterolemic, and anti-cancer effects. We also discuss the formation of bioactive peptides during fermentation, the main restrictions on the use of bioactive peptides and their applications in the field of functional foods. In general, food-derived biologically active peptides play an important role in human health and may be used in the development of novel foods with certain health claims.