Plant proteins are good alternative to animal sources in bioactive peptide production due to their safety, lowcost, rich resources and easy for large scale production. The bioactivities of the peptides derived from plant proteins including antihypertensive, hypocholesterolemic, immunomodulatory, antioxidant, antimicrobial, anti-diabetic, opiate and hepatoprotective effect are being increasingly recognized with regards to health promoting and disease prevention. In addition to bioactivities, the plant-derived bioactive peptides possess various functional properties including emulsifying and foaming properties, and water and oil retention capacities owning to the hydrophilic/lipophilic property, conformational flexibility and chain length of peptides. Hence, the plant-derived bioactive peptides are promising ingredients for the development of healthcare and functional products. This review provides the research progress on the biological activities and functional properties of plant derived peptides. The mechanism of action and structure-activity relationships of the bioactive peptide were also described, when known. Furthermore, recent developments, major challenges and prospect in the application of the plant-derive bioactive peptides in the development of functional products are discussed and summarized. The objective of this review is to improve the understanding of plant-derive bioactive peptides, and provide some constructive inspirations for further research and industrial application in the food and medicine industry.