The growing demand for macroalgal biomass as a source of proteins, peptides, and amino acids is garnering attention for their biological and functional properties. This study depicts the use of emerging green techniques, i.e. subcritical water, to hydrolyze protein from Padina tetrastromatica. The biomass was treated with subcritical water at varying temperatures between 100 and 220 °C for 10–40 min at a biomass to water proportion of 1:50 (w/v) and pressure of 4.0 MPa. The optimum conditions for recovering the maximum protein (127.2 ± 1.1 mg g−1), free amino acids (58.4 ± 1.0 mg g−1), highest degree of hydrolysis (58.8 ± 1.2 %) and low molecular weight peptides (<650 Da) were found to be 220 °C for 10 min. The amino acid profiling of the hydrolysate revealed that it contains 45 % essential amino acids, with the highest concentration of methionine (0.18 %), isoleucine (0.12 %) and leucine (0.10 %). It was found that the hydrolysate contains phenolics (23.9 ± 1.4 mg GAE g−1) and flavonoids (1.23 ± 0.1 mg QE g−1), which are largely responsible for antioxidant activity. The hydrolysate effectively inhibits acetylcholinesterase and α-amylase in vitro, with IC50 values of 17.9 ± 0.1 mg mL−1 and 16.0 ± 0.5 %, respectively, which can help prevent Alzheimer's disease and diabetes mellitus. Consequently, this study reveals that utilizing eco-friendly subcritical water hydrolysis method, 79 % of the protein was recovered from P. tetrastromatica, which might be an effective source of bioactive peptides in various nutraceutical, pharmaceutical and cosmeceutical applications.