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Functional foods are transitioning from polyphenol-centric paradigms toward peptide-driven bioactivity derived from microbial fermentation. This review identifies Limosilactobacillus reuteri fermented brown rice as a potent source of multifunctional bioactive peptides exhibiting antioxidant, anti-inflammatory, and neuroprotective properties. Quantitative analyses reveal increased γ-aminobutyric acid production (27 micrograms per milliliter), enhanced radical-scavenging activities, and reductions in stress-related biomarkers in vivo. Mechanistically, these peptides modulate the gut-brain axis via activation of the Kelch-like ECH-associated protein 1-nuclear factor erythroid 2-related factor 2 pathway, cytokine suppression, and neurotransmitter regulation. Despite these benefits, gastrointestinal instability and low bioavailability restrict translational potential. Nano-delivery systems, such as liposomes, chitosan nanoparticles, and stimuli-responsive hydrogels, address these challenges by facilitating targeted intestinal release, improved absorption, and prolonged bioactivity. This combined fermentation and nanotechnology approach provides a predictive, mechanism-based platform for precision nutrition, supporting advancements in mental health, metabolic regulation, and chronic disease prevention.