Lactobacillus helveticus is one of the species of lactic acid bacteria (LAB) most commonly used in the production of fermented milk beverages and some types of hard cheese. The versatile nature of this bacterium is based on its highly efficient proteolytic system consisting of cell-envelope proteinases (CEPs), transport system and intracellular peptidases. Besides use of L. helveticus in cheese processing, the production of fermented milk preparations with health promoting properties has become an important industrial application. Studies have shown that fermented dairy products are able to decrease blood pressure, stimulate the immune system, promote calcium absorption, and exert an anti-virulent effect against pathogens. These beneficial effects are produced by a variety of peptides released during the hydrolysis of milk proteins by the proteolytic system of L. helveticus, which provides the bacterium with its nutritional requirements for growth. In recent years, studies have focused on understanding the factors that affect the kinetics of milk protein hydrolysis by specific strains and have concentrated on the effect of pH, temperature, growth phase, and matrix composition on the bacterial enzymatic system. This review focuses on the role of the proteolytic system of L. helveticus in the production of bioactive compounds formed during fermentation of dairy products. Taking advantage of the powerful proteolytic system of this bacterium opens up future opportunities to search for novel food-derived compounds with potential health promoting properties.