Wheat bug is the major pest in Iran, so 3 million of 5.4 million hectares of bug-infested areas in Middle East are located in Iran. Despite all the progresses made in the field of pest control, bug is yet the hazardous pest especially in regions with arid and semi-arid climates. The insects such as Eurygaster and Aelia belong to the families of Scutelleridae and Peutatomide , inject a salivary proteinase into immature wheat kernels while feeding and hydrolyze gluten especially high molecular weight glutenin subunits and resulting in poor rheological properties, lead to have bread with low volume and unacceptable texture. On the other hand, protein hydrolysis of gluten can improve the functional and nutritional properties and result in producing bioactive peptides. These peptides contain 3-20 amino acid residues that are absorbed after gastrointestinal digestion and have many positive potential impacts on body physiological mechanisms such as blood pressure-lowering (ACE inhibitor), antioxidant activities, cholesterol-lowering ability, antimicrobial and immunomodulatory effects. In this study wheat samples with variable proportion of bug-infested grains was initially prepared of and then chemical tests were performed on them. The effect of bug protease on wheat gluten quality was also investigated. Results showed that Zeleny sedimentation value and gluten index decreases due to suni-bug damage. Also functional properties of wheat samples were determined. The highest emulsifying capacity was observed in 25% suni-bug wheat sample. By increasing the degree of hydrolysis, the protein solubility and foaming capacity were increased. The possible production of peptides with ACE inhibition and antioxidant ability (chelating OH and DPPH free radicals) were investigated and the results indicated that by increasing in degree of bug attack, producing of short peptides with ACE inhibitory and antioxidant activity is increased, therefore the highest percentage of ACE inhibition and antioxidant ability is observed in 100% suni-bug damaged sample whereas the lowest was evidenced in sound wheat sample. Matrix-assisted laser desorption/ionization (MALDI-TOF) was used to evaluate the hydrolysis of gluten and resultant peptides. Results showed that several short peptides with low molecular weight have been made due to the effect of salivary proteinase of wheat bug. Keywords : bioactive peptides, bugged wheat, degree of hydrolysis, functional properties