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The protein fraction of milk contains several components with physiological significance for the development of the newborn. Among them, immunomodulatory peptides and lactoferrin exemplify the complexity of biologically active substances of milk. Immunomodulatory peptides have latent activity within the native protein and are generated after proteolysis during gastrointestinal transit. Once they are generated, they modulate mucosal immunity, possibly by guiding the local immune system until it develops its full functionality. Lactoferrin is another milk bioactive compound with nutritional and health promoting properties; it modulates the microbial intestinal environment, displays anti-microbial activity against various pathogens and stimulates the establishment of beneficial microflora. The following overview focuses on the importance of immunomodulatory peptides and lactoferrin for the maturation of intestine and immune system that are functionally immature in the newborn.