Camel milk has emerged as a subject of significant scientific interest due to its unique bioactive peptides, which offer a wide array of health benefits. These peptides, derived from the hydrolysis of milk proteins, exhibit diverse functional properties that make them valuable in various applications across food, pharmaceutical, and nutraceutical industries. The production of bioactive peptides from camel milk involves several sophisticated techniques. Enzymatic hydrolysis is a common method, utilizing specific enzymes to cleave milk proteins at precise locations, resulting in peptides with targeted bioactivities. Fermentation, another effective approach, employs microorganisms to break down milk proteins, often yielding peptides with enhanced functional properties. Chemical synthesis allows specific peptide sequences, while recombinant DNA technology enables the production of designer peptides with tailored bioactivities. The bioactive peptides derived from camel milk exhibit a remarkable range of properties. Antimicrobial peptides offer natural preservative capabilities, potentially reducing the need for synthetic additives in food products. Antioxidant peptides combat oxidative stress, contributing to overall health and potentially extending the shelf life of food products. Antihypertensive peptides show promise in managing blood pressure, while antidiabetic peptides may aid in glucose regulation, offering potential therapeutic applications. Purification and isolation of these peptides are crucial steps in their production. The applications of camel milk-derived bioactive peptides are diverse and promising. Safety considerations and bioavailability are crucial aspects of utilizing these peptides. While generally considered safe due to their natural origin, thorough testing is necessary to ensure their efficacy and safety in various applications. This review comprehensively examines the production, properties, and applications of bioactive peptides derived from camel milk.