Bioactive peptides are emerging as promising class of drugs that could serve as α-glucosidase inhibitors for the treatment of type 2 diabetes. This article identifies structural and physicochemical requirements for the design of therapeutically relevant α-glucosidase inhibitory peptides. So far, a total of 43 fully sequenced α-glucosidase inhibitory peptides have been reported and 13 of them had IC50 values several folds lower than acarbose. Analysis of the peptides indicates that the most potent peptides are tri- to hexapeptides with amino acids containing a hydroxyl or basic side chain at the N-terminal. The presence of proline within the chain and alanine or methionine at the C-terminal appears to be relevant for high activity. Hydrophobicity and isoelectric points are less important variables for α-glucosidase inhibition whilst a net charge of 0 or +1 was predicted for the highly active peptides. In silico simulated gastrointestinal digestion revealed that the high and moderately active peptides, including the most potent peptide (STYV), were gastrointestinally unstable, except SQSPA. Molecular docking of SQSPA, STYV, and STY (digestion fragment of STYV) with α-glucosidase suggested that their hydrogen bonding interactions and binding energies were comparable with acarbose. The identified criteria will facilitate the design of new peptide-derived α-glucosidase inhibitors.