A multifactorial [temperature (40, 50 and 60°C), hydrolysis time (60, 150 and 240min) and enzyme to substrate ratio (E:S; 1.0, 1.5 and 2.0%)] design of experiments (DOE) was used to optimise the release of dipeptidyl peptidase IV (DPP-IV) inhibitory peptides during hydrolysis of bovine milk protein isolate (MPI) with Neutrase 0.8L™, yielding 15 hydrolysates (H1-H15). Variation in temperature and time had a significant effect on DPP-IV inhibitory properties (p<0.05) in contrast with E:S (p>0.05). The DPP-IV half maximal inhibitory concentration (IC50) of H4, a potent sample, was maintained following simulated gastrointestinal digestion (SGID, DPP-IV IC50=0.60±0.06vs. 0.58±0.09mgml-1, p>0.05). Several peptides with DPP-IV inhibitory features or known activity were identified by liquid chromatography-tandem mass spectrometry (LC-MS/MS) within the hydrolysates. MPI hydrolysates may have potential for use as dietary ingredients with serum glucose lowering activity in humans.