Bioactive peptides (BPs) are multifunctional compounds derived from proteins, which exhibit different functions and show significant pharmacological effects. In the past few decades, the study on food-derived BPs had never been interrupted, and a wide range of BPs sequences have been identified due to its wide range of health benefit and multiple bioactivities, such as antioxidant, immune activity, anti-aging, antiinflammatory activities. The bioactivities of BPs are mainly depend on the amino acid composition, size, sequence and physicochemical properties. What’s more, BPs is reasonable and feasible as functional foods and pharmaceutical preparations to promote human health for its advantages of high safety, rich source, obvious physiological effect and easy digestion and absorption. However, there are many obstacles that limit the development of BPs. This review mainly summarizes the preparation methods, biological properties and applications of food-derived BPs. The opportunities and challenges of food-derived BPs as functional products are also disscussed. This review may provide a reference for the further utilization, deep processing and commercial development of food derived BPs.