<p>Milk proteins are now recognized as precursors to a vast library of bioactive peptides (BAPs) that exert physiological effects beyond basic nutrition. This review provides a critical and mechanistic assessment of three prominent classes of dairy-derived BAPs: opioid, antihypertensive, and mineral-binding peptides. Opioid peptides, particularly β-casomorphin-7 (BCM-7) from A1 β-casein, are examined in the context of their controversial links to human health, exploring both µ-opioid receptor agonism and emerging non-opioid pathways. Antihypertensive peptides, primarily acting as angiotensin-converting enzyme (ACE) inhibitors, are reviewed, highlighting the evolution from a single-target model to a systems-level understanding involving the ACE2 axis and direct vascular effects, while also addressing the inconsistent evidence from human clinical trials. Mineral-binding caseinophosphopeptides (CPPs) are analyzed through the mineral carrier hypothesis, critically evaluating the conflicting data on their ability to enhance the bioavailability of calcium, iron, and zinc, and underscoring the crucial role of peptide specificity. Cross-cutting themes, including advanced peptidomic methodologies for peptide identification and the formidable bioavailability barrier that often explains the in vitro-in vivo disconnect, are synthesized. Finally, we identify key knowledge gaps and propose future directions focused on rigorous clinical validation and mechanistic specificity to unlock the therapeutic potential of these peptides.</p>