Ginseng and red ginseng are popular as functional foods in Asian countries such as Korea, Japan, and China. They possess various pharmacologic effects, including antioxidant, anti-inflammatory, anti-cancer, anti-obesity, and anti-viral activities. Ginsenosides are a class of pharmacologically active components in ginseng and red ginseng. Major ginsenosides are converted to minor ginsenosides, which have better bioavailability and cellular uptake, by microorganisms and enzymes. Studies have shown that ginseng and red ginseng can affect the physicochemical and sensory properties, ginsenosides content, and functional properties of dairy products. In addition, lactic acid bacteria in dairy products can convert into minor ginsenosides and ginseng and red ginseng improve functionality of products. This review will discuss the characteristics of ginseng and red ginseng, and their bioconversion, functionality, and application in dairy products.