Bovine milk peptides are the protein fragments with diverse bioactive properties having antioxidant, anticarcinogenic, other therapeutic and nutraceutical potentials. These peptides are formed in milk by enzymatic hydrolysis, gastrointestinal digestion and fermentation processes. They have significant health impact with high potency and low toxicity making them a suitable natural alternative for preventing and managing diseases. Antibiotic resistance has increased the quest for better peptide candidates with antimicrobial effects. This article presents a comprehensive review on well documented antimicrobial, immunological, opioid, and anti-hypertensive activities of bovine milk peptides. It also covers the usage of computational biology tools and databases for prediction and analysis of the food-derived bioactive peptides. In silico analysis of amino acid sequences of Bos taurus milk proteins have been predicted to generate peptides with dipeptidyl peptidase IV inhibitory and ACE inhibitory properties, making them favorable candidates for developing blood sugar lowering drugs and anti-hypertensives. In addition to the prediction of new bioactive peptides, application of bioinformatics tools to predict novel functions of already known peptides is also discussed. Overall, this review focuses on the reported as well as predicted biologically active peptide of casein and whey proteins of bovine milk that can be utilized to develop therapeutic agents.