In the present study, we aimed to evaluate the effects of hatching enzymes on the egg envelope digestion during the hatching period in the male brooding seahorse. The complementary DNAs encoding two hatching-enzyme genes, high choriolytic enzyme (HCE) and low choriolytic enzyme (LCE), were cloned and functionally characterized from the lined seahorse (Hippocampus erectus). The genomic-synteny analysis confirmed that teleosts shared LCE gene synteny. In contrast, the genomic location of HCE was found to be conserved with pipefish, but not other teleosts, suggesting that translocation into a novel genomic location occurred. Whole-mount in situ hybridization showed that HCE and LCE mRNAs were expressed in hatching gland cells. To determine the digestion mechanisms of HCE and LCE in hatching, recombinant HCE and LCE were generated and their enzyme activities were examined using fertilized egg envelopes and synthetic peptides. Seahorse HCE and LCE independently digested and softened the egg envelopes of the lined seahorse. Although the egg envelope was digested more following HCE and LCE co-treatment, envelope solubilization was not observed. Indeed, both HCE and LCE showed similar substrate specificities toward four different synthetic peptides designed from the cleavage sites of egg envelope proteins. HCE and LCE proteins from other euteleostean fishes showed different specificities, and the egg envelope was solubilized by the cooperative action of HCE and LCE. These results suggest that the function of LCE was degenerated in the lined seahorse. Our results imply a digestion mechanism for evolutionary adaptation in ovoviviparous fish with male pregnancy.