The investigation aimed at assessing a comparative study on the production and characterization of ACE inhibitory, anti-diabetic, and anti-inflammatory activities, along with the production of ACE inhibitory and anti-diabetic peptides through the fermentation of buffalo and camel milk byLimosilactobacillus fermentum(KGL4) andSaccharomyces cerevisiae(WBS2A). The angiotensin-converting enzyme (ACE) inhibitory and anti-diabetic properties were evaluated at particular time intervals (12, 24, 36, and 48 h) at 37 °C, and we discovered maximum activity at 37 °C after 48 h of incubation. The maximum ACE inhibitory, lipase inhibitory activities, alpha-glucosidase inhibitory, and alpha-amylase inhibitory activities were found in the fermented camel milk (77.96 ± 2.61, 73.85 ± 1.19, 85.37 ± 2.15, and 70.86 ± 1.02), as compared to the fermented buffalo milk (FBM) (75.25 ± 1.72, 61.79 ± 2.14, 80.09 ± 0.51, and 67.29 ± 1.75). Proteolytic activity was measured with different inoculation rates (1.5%, 2.0%, and 2.5%) and incubation times (12, 24, 36, and 48 h) to optimize the growth conditions. Maximum proteolysis was found at a 2.5% inoculation rate and at a 48 h incubation period in both fermented buffalo (9.14 ± 0.06) and camel milk (9.10 ± 0.17). SDS-PAGE and 2D gel electrophoresis were conducted for protein purification. The camel and buffalo milk that had not been fermented revealed protein bands ranging from 10 to 100 kDa and 10 to 75 kDa, respectively, whereas all the fermented samples showed bands ranging from 10 to 75 kDa. There were no visible protein bands in the permeates on SDS-PAGE. When fermented buffalo and camel milk were electrophoresed in 2D gel, 15 and 20 protein spots were detected, respectively. The protein spots in the 2D gel electrophoresis ranged in size from 20 to 75 kDa. To distinguish between different peptide fractions, water-soluble extract (WSE) fractions of ultrafiltration (3 and 10 kDa retentate and permeate) of fermented camel and buffalo milk were employed in RP-HPLC (reversed-phase high-performance liquid chromatography). The impact of fermented buffalo and camel milk on inflammation induced by LPS (lipopolysaccharide) was also investigated in the RAW 264.7 cell line. Novel peptide sequences with ACE inhibitory and anti-diabetic properties were also analyzed on the anti-hypertensive database (AHTDB) and bioactive peptide (BIOPEP) database. We found the sequences SCQAQPTTMTR, EMPFPK, TTMPLW, HPHPHLSFMAIPPK, FFNDKIAK, ALPMHIR, IPAVFK, LDQWLCEK, and AVPYPQR from the fermented buffalo milk and the sequences TDVMPQWW, EKTFLLYSCPHR, SSHPYLEQLY, IDSGLYLGSNYITAIR, and FDEFLSQSCAPGSDPR from the fermented camel milk.