Plant proteins are gaining popularity as a safe and sustainable source of protein for the world's population because of their lower carbon footprint. Pseudocereals (buckwheat, quinoa, and amaranth) are sources of proteins with an ideal composition of amino acids (AAs) and have become standard foods because of their health benefits. Multifunctional peptides prepared from the proteins of pseudocereals are used to treat various chronic diseases. Thus, it is essential to understand the biological functions of these peptides. This review summarizes the producing, separating, and identifying methods as well as biological properties of pseudocereal protein-derived bioactive peptides with identified sequences. A comparative analysis of the quality of pseudocereal proteins and peptides and their biological functions is presented. The current limitation and future possibilities of pseudocereal cultivation and challenges and opportunities of pseudocereal peptides were discussed. Various protein fractions from pseudocereals are enzymatically hydrolysed to produce a dynamic range of biologically active peptides. The critical factors in the production of these novel peptides are the enzyme type, the reaction conditions, and the type of treatment. Amaranth peptides have been shown to have antihypertensive, antioxidant, and anti-inflammatory properties, and buckwheat and quinoa hydrolysates have excellent antimicrobial, anticancer, and antidiabetic activities. The 11S globulin protein fractions show potent activity to inhibit angiotensin-converting enzyme and dipeptidyl peptidase IV. It was observed that the short sequence AAs have been shown to possess good antihypertensive activity. We conclude that pseudocereals are an alternative source of complete protein that can be used to make peptides with demonstrated efficacy in the treatment of chronic diseases.