The prevalence of individuals with suboptimal health and chronic diseases has increased steadily with the increase in aging populations worldwide. Owing to increasing health awareness, the consumer demand for natural, nutritious, and functional foods has grown substantially and become more diversified and personalized. Active peptides, which are a class of multifunctional small molecular compounds composed of amino acids, have demonstrated excellent taste-enhancing, antibacterial, antioxidative, blood pressure-lowering, and immune-regulating properties. Because they are important active components in functional foods, condiments, and medicines, active peptides have become the most popular research topic in recent years and are considered as functional factors with great prospects in the international field of food science. Aside from having unique flavor qualities and significant probiotic effects, fermented foods are in fact natural sources of active peptides. A variety of functional peptides with good nutritional functions, excellent taste-enhancing properties, and high physiological activities have been identified from various fermented foods. Herein, the current research progress on the classification, production mechanism, taste enhancement properties, and physiological activities of active peptides in fermented foods are reviewed. Additionally, the potential applications of these active peptides in the food industry are discussed. This review is expected to serve as a reference guide for the further research, development, and utilization of active peptides from fermented foods.