Marine biomass, Saccharina japonica was fermented as a solid-fermented substrate by Monascus spp. for the production of bioactive ethanolic extract. The 2,2-diphenyl-1-picrylhydrazyl (DPPH), 2,2′-Azino-bis-3-ethylbenzthiazoline-6-sulfonic acid (ABTS), superoxide anion radical scavenging and DNA protection activities of ethanolic extracts obtained from S. japonica fermented by M. purpureus (SjMp) showed the highest activity followed by M. kaoliang fermented S. japonica (SjMk) and unfermented (SjU) extract at 10 mg/mL concentration. Kinetic analysis revealed that ethanolic extract of fermented S. japonica inhibited the α-amylase competitively but α-glucosidase displayed competitive inhibition at 10 mg/mL concentration and non-competitive inhibition at 1 mg/mL concentration. The Linewaver-Burk kinetics analysis revealed that ethanolic extract of SjMk showed significantly higher Km value (4.55 mg) than SjMP (2.74 mg) followed by SjU (0.35 mg) at 10 mg/mL concentrations in α-amylase inhibition. But incase of α-glucosidase inhibition, the Km value was maximum in ethanolic extract of SjMp (2.30 mg) with Vmax (0.29 mg/min) at 10 mg/mL concentrations. Both of the fermented and unfermented samples did not show toxic effect on Caco-2 cells. The amino acid compositional analysis showed that fermentation process changed free amino acids contents in ethanolic extract. Monascus-fermented ethanolic extract showed antibacterial activity on Aeromonas hydrophila and Staphylococcus aureus. So, Monascus spp. fermented S. japonica extract played an important role in prevention of free radicals formation and hyperglycemia which can be applied in biofunctional food formulation.