Lactic acid bacteria (LAB) have been used as starter cultures in the manufacturing processes of fermented dairy products such as cheese and yogurt. LAB have a proteolytic system to use the nitrogen source from milk for their growth. The proteolytic system involved in casein utilization provides cells with essential amino acids during growth in milk and is also of industrial importance, because of its contribution to the development of the organoleptic properties such as flavor of fermented milk products. In the most extensively studied LAB, Lactococcus lactis, the main features of the proteolytic system comprise 3 groups. The first is proteinase, which initially cleaves the milk protein to peptides. The second group consists of transport systems for the internalization of oligopeptides, which are involved in the cellular uptake of small peptides and amino acids. The third group, peptidases in the cell, cleaves peptides into smaller peptides and amino acids. This review is to provide the information about the proteolytic system of LAB.