The dairy sector is one of the most important industrial segments in peptidase applications These enzymes can hydrolyze milk proteins into medium/short peptides and amino acids, as well as modulate their nutritional and functional properties, which comprise sensory changes (e.g., texture and flavor), digestibility and solubility improved, as well as the release of bioactive compounds. Therefore, they have been applied to develop different dairy products, such as cheese and a wide range of products deriving from caseins and whey proteins. However, it is important to understand the structure of milk proteins at the time to select the best peptidase to achieve the desired hydrolyzed products. In addition, peptidases have different specificities, such as catalytic sites and optimal pH, which must be taken into account before their application in the dairy matrix. The present review aims to address important aspects associated with peptidase features and their current biotechnological applications in the dairy industry.