Novel dairy fractions have been isolated and are now commercially available. Several of them have been shown to have biological activities in various test systems. α-Lactalbumin was first isolated to provide a good source of tryptophan, often the first limiting amino acid in infant formulas, but has then been shown to be digested into smaller peptides with antimicrobial and prebiotic activities, immunostimulatory effect and acting as enhancers of mineral absorption. Lactoferrin bioactivities include antibacterial and antiviral effects, regulation of immune function, stimulation of intestinal proliferation and differentiation and facilitating iron absorption, but these activities may have been limited due to earlier contamination with LPS. Lactoferrin free of lipopolysaccharide may prove to be more effective with regard to exerting these activities. Osteopontin is a heavily phosphorylated and glycosylated protein that modulates immune function and stimulates Th1/Th2 switching, and, possibly, also affects bone mineralization and growth. Biological activities of lactoferrin may be facilitated by osteopontin. Milk fat globule membranes are a fraction that has previously been excluded from infant formulas, but components of this fraction have been shown to exhibit antimicrobial activities and to prevent infection. Further clinical studies are needed on infants fed formulas with these components incorporated.