Plants have evolved a sophisticated innate immune system to cope with a diverse range of phytopathogens and insect herbivores. Plasma-membrane-localized pattern recognition receptors (PRRs), such as receptor-like kinases (RLK), recognize special signals, pathogen- or damage-associated molecular patterns (PAMPs or DAMPs), and trigger immune responses. A growing body of evidence shows that many peptides hidden in both plant and pathogen functional protein sequences belong to the group of such immune signals. However, the origin, evolution, and release mechanisms of peptide sequences from functional and nonfunctional protein precursors, known as cryptic peptides, are largely unknown. Various special proteases, such as metacaspase or subtilisin-like proteases, are involved in the release of such peptides upon activation during defense responses. In this review, we discuss the roles of cryptic peptide sequences hidden in the structure of functional proteins in plant defense and plant-pathogen interactions.