Cancer is the most widely recognized reason for human deaths globally. Conventional anticancer therapies, including chemotherapy and radiation, are very costly and induce severe side effects on the individual. The discovery of anticancer compounds including dairy-derived peptides may thus be a better alternative for cancer prevention and management. Anticancer peptides exist in the amino acid chain of milk proteins and can be generated during proteolytic activities such as gastrointestinal digestion or food processing including fermentation by lactic acid bacteria (LAB) and probiotics. However, proteolytic capacity of these bacteria is strain specific. The study was conducted to establish proteolytic activity of Lactobacillus (L.) acidophilus (ATCC® 4356™), L. casei (ATCC® 393™) and L. paracasei subsp. paracasei (ATCC® BAA52™) in yogurt. Crude peptides were separated by ultra-high centrifugation and tested for antioxidant and antimutagenic activities. The degree of proteolysis highly correlated with these bioactivities, and its value (11.91 %) for samples containing all the cultures was double that of the control. Liberated peptides showed high radical scavenging activities with 1,1- diphenyl-2-picrylhydrazyl and 2,2’-azino-bis(3-ethylbenzothiazoline-6-sulphonic acid), IC50 1.51 and 1.63 mg/ml respectively and strong antimutagenicity (26.35 %). These probiotics enhanced the generation of bioactive peptides in yogurt.