β Cyclodextrin nanocomplexes with extensive whey and colostrum hydrolysates possessing acceptable flavor properties serve as potential sources of bioactive peptides. In this study, comparative characterization of dairy protein hydrolysates and their complexes with β cyclodextrin is presented. Antioxidant activity of studied samples was estimated by fluorometric method, the formation of clathrates with cyclic oligosaccharide was determined using thermogravimetric analysis. A significant decrease in bitterness of peptides included in cyclic oligosaccharides was established compared with samples of dairy hydrolysates. 2.1/1.3 fold increase in the antioxidant potential of β cyclodextrin clathrates with whey/colostrum hydrolysates was recorded versus unbound peptide fractions. According to toxicological tests on Tetrahymena pyriformis, the samples of whey hydrolysate and the resulting nanocomplex were referred to as non-toxic and slightly hazardous compounds, respectively. The dynamics of body weight gain and the relative weight coefficient of internal organs revealed no differences compared to the control group of Rattus norvegicus. The data on differentiation of blood cells, their death, and cytogenetic disorders demonstrated that a sample of cyclic oligosaccharides with whey peptides is non-toxic at the maximum dosages allowable for administration. β Cyclodextrin complexing with dairy peptides resulted in enhanced radical-reducing activity and improved flavor properties, making the clathrates promising and safe ingredients of special nutrition formulas.