Processed fish by-products are valuable sources of peptides due to their high protein content. However, the bitterness of these peptides can limit their use. This review outlines the most recent advancements and information regarding the reduction of bitterness in fish by-products derived peptides. The sources and factors influencing bitterness, the transduction mechanisms involved, and strategies for reducing bitterness are highlighted. Bitterness in peptides is mainly influenced by the source, preparation method, presence of hydrophobic amino acid groups, binding to bitter receptors, and amino acid sequence. The most widely utilized techniques for eliminating bitterness or enhancing taste include the Maillard reaction, encapsulation, seperating undesirable components, and bitter-blockers. Finally, a summary of the current challenges and future prospects in the domain of fish by-products derived peptides is given. Despite some limitations, such as residual bitterness and limited industrial application, there is a need for further research to reduce the bitterness of fish by-products derived peptides. To achieve this goal, future studies should focus on the technology of fish by-products derived peptide bitterness diminishment, with the aim of producing high-quality products that meet consumer expectations.