As an important functional protein resource in dairy products, milk protein has become a research hotspot due to its excellent nutritional value and multiple biological activities. Recent studies have made breakthrough progress in the preparation and functional analysis of milk protein-derived peptides. There are various bio-processing methods to precisely release bioactive peptides with specific functions from milk protein, such as directed enzymatic hydrolysis and controlled fermentation. These active components demonstrate significant health benefits in antioxidant defense, pathogen inhibition, immune homeostasis regulation, and blood pressure control. This paper systematically reviews the technologies for the preparation of milk protein-derived peptides, including enzymatic hydrolysis, microbial fermentation, chemical synthesis and computer simulation and prediction techniques, and conducts a comparative analysis the effectiveness and characteristics of these technologies. Furthermore, it elucidates the mechanisms by which milk protein-derived peptides exert their biological activities and their bioavailability, and evaluates their potential for application in functional foods and pharmaceutical formulations. By integrating existing research findings, this review provides a scientific basis for optimizing the production process of milk proteinderived peptides and expanding their application scenarios, thereby promoting their industrial development.