Food protein-derived peptides serve as food ingredients that can influence flavor and bioactivity of foods. The Maillard reaction plays a crucial role in food processing and storage, and generates a wide range of Maillard reaction products (MRPs) that contribute to flavor and bioactivity of foods. Even though the reactions between proteins and carbohydrates have been extensively investigated, the modifications of food protein-derived peptides and the subsequent impacts on flavor and bioactivity of foods have not been fully elucidated. In this review, the flavor and bioactive properties of food-derived peptides are reviewed. The formation mechanisms with respect to MRPs generated from food protein-derived peptides have been discussed. The state-of-the-art studies on impacts of the Maillard reaction on flavor and bioactivity of food protein-derived peptides are also discussed. In addition, some potential negative effects of MRPs are described.