Polypeptides are short chains of amino acids. Peptides are released from the proteins by enzymatic hydrolysis, microbial fermentation, or food processing. Proteolytic enzymes are used to break down the native protein into smaller peptides. Characterization of these peptides is done either based on molecular weight (MW) or by identifying the sequence of amino acids. Functional properties such as solubility, water binding capacity, emulsion capacity, dispersibility and foaming capacity decide the final application of these peptides in the food industry.