The casein of the milk of bactrian camels in Xinjiang was hydrolyzed with pepsin and/or trypsin, and the angiotensin converting enzyme (ACE) inhibitory activity of the resulting hydrolysates was determined by measuring the production of hippuric acid (HA) by reversed-phase high performance liquid chromatography (RP-HPLC) using an external standard method. The competitive relationship between the casein hydrolysates and captopril was investigated by using the Michaelis-Menten equation. The ACE inhibitory activity of the retenates obtained after ultrafiltration of the hydrolysates through membranes with molecular mass cutoff of 50, 10 and 3 kDa was determined. The results showed that the degree of hydrolysis was 3.7% after 4 h hydrolysis with trypsin compared to 16.58% with pepsin. The percentage of ACE inhibition by the 2 h hydrolysate with trysin was 74.67% as opposed to 72.33% with pepsin. When the casein was hydrolyzed sequentially with pepsin for 2 h followed by trypsin for 4 h, the degree of hydrolysis increased in a linear manner with hydrolysis time. The percentage of ACE inhibition by the hydrolysate within 2 h reached 66.27%, which did not increase with hydrolysis time. Trypsin may act on the bioactive peptides, thus reducing the enzyme activity. At increasing substrate concentration, the hydrolysate could not counteract the ACE inhibitory effect of the polypeptides, which was characteristics of non-competitive inhibitors. The inhibitory constant Ki of the polypeptides was 0.25 mg/mL. The ACE inhibitory activity of the 3–10 kDa retenate was the highest, and the peptides LLVVYPWTR and VLPVPQQMVPYPQR were found to be structurally similar to the known ACE inhibitory peptides.