Abstract: Collagen is not a uniform substance, but is rather a family of protein. It is a group of naturally occurring proteins found in animals, especially in the flesh and connective tissues of mammals. For food or nutritional purpose, collagen is broken down into gelatine which can be broken down further into hydrolysed collagen. Hydrolysed collagen is a polypeptide composite made by further hydrolysis of denatured collagen or gelatin and the molecular weights are within the range approximately 500 to 25000 Da. In hydrolysate, the molecular mass and the size of the molecules have been deliberately decreased by hydrolysis part of peptide bonds of the gelatine molecules. This will make the hydrolysed collagen dissolved in cold water and does not gel anymore but still has surface active properties. The processes involved in processing hydrolysed collagen are demineralization, extraction of collagen to gelatine, enzymatic hydrolysis to obtain hydrolysed collagen, ion exchange, filtration, evaporation, sterilization and finally drying. In previous study a large number of studies focused on the enzymatic hydrolysis of collagen or gelatine for the production of bioactive peptide. However, studies focusing on the process development of hydrolysed collagen are still limited. This study thus will briefly describe the process design, market potential, research and development work and potential future research development for the production of hydrolysed collagen from agriculture sources such as cattle bones, fish skins and fish scales.