Dietary fiber plays an important role in the prevention and reduction of chronic diseases. This study evaluated the effect of drying methods (hot air drying, vacuum drying, and freeze-drying) on physicochemical properties and in vitro hypoglycemic effects of soluble and insoluble dietary fiber from orange peels. Freeze-drying significantly decreased the bulk density of the soluble and insoluble dietary fiber and increased the viscosity of soluble dietary fiber solutions (36.33 mPa s). Hot air drying caused a decrease in the molecular weight of soluble dietary fiber compared with freeze-drying. Freeze-dried dietary fibers exhibited a higher glucose adsorption capacity and glucose dialysis retardation index than fibers from other drying conditions, and this method enhanced the inhibitory effect of dietary fiber on α-amylase activity. Based on these results, freeze-drying is suggested for use in dietary fiber processing to obtain high-quality products for use in functional foods. Practical applications When formulating fiber-rich food products, the functional properties of dietary fiber must be considered. The functional properties depend on the processing conditions and physicochemical properties of the fiber. The results show that freeze-drying has significant advantages in improving physicochemical properties and in vitro hypoglycemic effects of dietary fiber, and the application of freeze-drying in dietary fiber processing could enhance its nutrient and commercial values.