Chronic diseases, including metabolic diseases, have become a worldwide public health issue. Research regarding the use of bioactive peptides or protein hydrolysates derived from food, as the diet-based strategies for the prevention and mitigation of chronic diseases, has increased exponentially in the past decades. Numerous in vitro and in vivo studies report the efficacy and safety of food-derived bioactive peptides and protein hydrolysates as antihypertensive, anti-inflammatory, antidiabetic, and antioxidant agents. However, despite promising preclinical results, an inadequate understanding of their mechanisms of action and pharmacokinetics restrict their clinical translation. Commercialization of bioactive peptides can be further hindered due to scarce information regarding their efficacy, safety, bitter taste, as well as the lack of a cost-effective method of production. This review provides an overview of the current clinical evidence and challenges to commercial applications of food-derived bioactive peptides and protein hydrolysates for the prevention and alleviation of chronic diseases.