ABSTRACTBioactive peptides and protein hydrolysates have gained considerable attention in the food industry and functional food markets due to their diverse health effects, including antioxidant, antihypertensive, and antidiabetic properties. This study aimed to produce combined soy and corn protein hydrolysates using Alcalase (Al), modification of Al‐hydrolysates through sequential hydrolysis using Flavourzyme (Al‐FL), cross‐linking of Al‐hydrolysates using microbial transglutaminase (MTGase) (Al‐TG), and fractionation of Al‐hydrolysates by ultrafiltration (UF) with molecular weight (MW) cut‐off of 100 (Al‐F4), 30 (Al‐F3), 10 (Al‐F2), and 2 kDa (Al‐F1). Notably, the < 2 kDa fraction (Al‐F1) showcased exceptional biological activities, including antioxidant (81.54% DPPH, 98.02% ABTS), antihypertensive (95.45%), and antidiabetic effects (44.72% α‐glucosidase, 77.52% α‐amylase), linked to its high hydrophobic amino acid content and low molecular weights (111 and 263 Da). Conversely, the higher molecular weight fraction (Al‐TG) excelled in emulsion and foam stability, attributed to its balanced amino acid profile and larger peptides (1385–7057 Da). Our findings reveal that specific protein hydrolysate fractions, particularly Al‐F1 and Al‐TG, are promising for applications in food and pharmaceutical formulations due to their enhanced biological and functional properties.