This study aimed at developing and characterizing a fermented milk with a potentially anti-hypertensive effect due to the concurrent presence of Angiotensin-I Converting Enzyme (ACE)-inhibitory peptides and Gamma-Amino Butyric Acid (GABA). Preliminarily, lactic acid bacteria strains were screened based on the capacity of releasing ACE-inhibitory peptides and of synthesizing GABA. The most potent RP-FPLC fraction from the milk fermented with Lactococcus lactis DIBCA2 had an ACE-inhibitory activity, expressed in terms of IC 50 , of 5 ± 2 mg/mL, a value which compares well to those reported for the majority of ACE-inhibitory peptides identified in fermented milks. This fraction contained a mixture of six peptides, five of which shared motifs in common with previously reported ACE-inhibitory peptides. Lactobacillus plantarum PU11 was selected as the highest producer of GABA, ca. 77.4 mg/kg after 120 h of milk fermentation. Both of the above mentioned strains were selected and used as starters for consecutive milk fermentation. After fermentation, the milk contained both the lactic acid bacteria at the cell density of ca. 8.0 log CFU/ml, had a pH of ca. 4.45, and showed ACE-inhibitory activity (IC 50 = 0.70 ± 0.07 mg/mL) and a concentration of GABA (ca. 144.5 mg/kg), which were compatible with the dosage for a mild antihypertensive effect. Keywords: Fermented milk, Angiotensin converting enzyme inhibitory peptides, Gamma-amino butyric acid, Lactic acid bacteria