Background Angiotensin I-converting enzyme (ACE) inhibitors have been reported to reduce mortality in patients with hypertension. Compared to chemosynthetic drugs, ACE inhibitors derived from natural sources such as food proteins are believed to be safer for consumption and to have fewer adverse effects. Some edible mushrooms have been reported to significantly reduce blood pressure after oral administration. In addition, mushrooms are known to be rich in protein content. This makes them a potential source of ACE inhibitory peptides. Hence, the objective of the current study was to isolate and characterise ACE inhibitory peptides from an edible mushroom, Pleurotus cystidiosus. Methods ACE inhibitory proteins were isolated from P. cystidiosus based on the bioassay guided purification steps, i.e. ammonium sulphate precipitation, reverse phase high performance liquid chromatography and size exclusion chromatography. Active fraction was then analysed by LC-MS/MS and potential ACE inhibitory peptides identified were chemically synthesized. Effect of in vitro gastrointestinal digestions on the ACE inhibitory activity of the peptides and their inhibition patterns were evaluated. Results Two potential ACE inhibitory peptides, AHEPVK and GPSMR were identified from P. cystidiosus with molecular masses of 679.53 and 546.36 Da, respectively. Both peptides exhibited potentially high ACE inhibitory activity with IC50 values of 62.8 and 277.5 μM, respectively. SEC chromatograms and BIOPEP analysis of these peptides revealed that the peptide sequence of the hexapeptide, AHEPVK, was stable throughout gastrointestinal digestion. The pentapeptide, GPSMR, was hydrolysed after digestion and it was predicted to release a dipeptide ACE inhibitor, GP, from its precursor. The Lineweaver-Burk plot of AHEPVK showed that this potent and stable ACE inhibitor has a competitive inhibitory effect against ACE. Conclusion The present study indicated that the peptides from P. cystidiosus could be potential ACE inhibitors. Although these peptides had lower ACE inhibitory activity compared to commercial antihypertensive drugs, they are derived from mushroom which could be easily obtained and should have no side effects. Further in vivo studies can be carried out to reveal the clear mechanism of ACE inhibition by these peptides.