Bioactive peptides are promising cosmetic active ingredients that can improve skin health and appearance. They exhibit a broad spectrum of activity, including anti–ageing, antioxidant, antimicrobial and anti–inflammatory. The aim of this study was to develop a safe, stable and efficacious environmentaly friendly ("green") emulsion using milk protein hydrolysate as a model active ingredient. Potential emulsions were formulated with biodegradable emollients, stabilised with a naturally-derived mixed emulsifier and prepared by cold process. They were evaluated for rheological behavior (continuous rotation and oscillation tests), physical stability (dynamic mechanical thermal analysis - DMTA test) and texture profiles, as well as for cytotoxic, antioxidant and antimicrobial effects. Rheological characterization revealed shear-thinning flow behaviour with yield point from continuous rotation tests and predominantly elastic character from oscillation (amplitude and frequency sweep) tests, with small structural change detected in the DMTA test. These results implied satisfactory rheological properties and good stability. Texture analysis revealed acceptable spreadability and substantivity of the emulsions. The protein hydrolysate showed antioxidant activity. The developed emulsions showed low antibacterial activity against selected microorganisms, but this was due to the action of preservatives, not peptides. All potential emulsions showed desirable safety profile. The results obtained provide the basis for the next stage of formulation development, i.e. in vivo efficacy tests.