Biologically active peptides that are derived from or are similar to sequences of the alphaS1-, alphaS2-, beta- or kapa-casein fractions of milk casein. These peptides are capable of immune modulation and other therapeutic activities, including but not limited to stimulating and enhancing immune response, protecting against viral infection, normalizing serum cholesterol levels, and stimulating hematopoiesis. The casein-derived peptides are non-toxic and can be used to treat and prevent immune pathologies, diabetes, hypercholesterolemia, hematological disorders and viral-related diseases.