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Diabetes mellitus, a group of metabolic disorders characterized by persistent hyperglycemia, affects millions of people worldwide and is on the rise. Dietary proteins, from a wide range of food sources, are rich in bioactive peptides with antidiabetic properties. Notable examples include AGFAGDDAPR, a black tea-derived peptide, VRIRLLQRFNKRS, a β-conglycinin-derived peptide, and milk-derived peptide VPP, which have shown antidiabetic effects in diabetic rodent models through variety of pathways including improving beta-cells function, suppression of alpha-cells proliferation, inhibiting food intake, increasing portal cholecystokinin concentration, enhancing insulin signaling and glucose uptake, and ameliorating adipose tissue inflammation. Despite the immense research on glucoregulatory properties of bioactive peptides, incorporation of these bioactive peptides in functional foods or nutraceuticals is widely limited due to the existence of several challenges in the field of peptide research and commercialization. Ongoing research in this field, however, is fundamental to pave the road for this purpose.