The present article reviews recent advances in our understanding of the regulatory role played by milk in the physiology of the neonate. Importance of milk bioactive proteins and peptides (BAPP) and their endogenous counterparts (hormones, gut regulatory peptides, growth factors) in the regulation of the development of the gastrointestinal tract (GIT) structure and function in the new-born is discussed. Mother's milk is often replaced with a milk formula that contains little or no BAPP. Although deprivation of milk BAPP is not lethal to the neonate, it affects GIT development processes, produces noticeable reduction of animal performance and lowers the resistance to GIT disorders. It is recommended that either the industrial processing is modified so as to avoid BAPP degradation or that the commercial milk formulas and weaning feeds should be supplemented with BAPP.