Digestibility, an indicator of protein bioavailability, is essentially a measure of the susceptibility of a protein towards proteolysis. Proteins with higher digestibility have been linked with better health outcomes. Animal proteins are generally considered to be of better nutritional value than plant proteins not only because they are a good source of essential amino acids but also due to their higher digestibility in the human gastro-intestinal tract. With the recent emergence of alternative food protein sources, which are now processed in a completely new way to design new foods or new versions of the conventional foods, it has become extremely important to understand their digestion characteristics. This review discusses the factors that affect protein digestibility, including protein source, structure, type of processing, and modification, with a particular focus on the effects of non-protein components present in food matrix. To obtain the desired functionality, particularly for alternate proteins, numerous physical, chemical, and enzymatic methods for modification have been reported. These modifications may alter structural characteristics of proteins by inducing structural modifications such as protein unfolding, crosslinking, and aggregation. Depending upon the protein reactivity during processing, the susceptibility of proteins towards hydrolysis by digestive enzymes might change, affecting not only the overall protein digestibility but also the rates of release of polypeptides and amino acids. The faster rates of protein digestion have been linked with muscle anabolism, suggesting the need and importance of classifying the new, emerging and alternative protein sources according to their rates of digestion into rapidly (RDP), slowly digestible (SDP) and resistant (RP) proteins. More research needs to be focussed on converting, through processing, the undigestible or RP into RDP or SDP to achieve better health outcomes.