Peptide is a promising source of safe hypoglycaemics in nutraceuticals. A biocatalytic approach, isolation and purification procedures, amino acid analysis, and identification of peptides were implemented successively. Results indicated that the hydrolysates with high α-glucosidase inhibitory activity (α-GIA) were obtained from hemp seed protein (HSP) by Alcalase treatment at the degree of hydrolysis (DH) of 27.24 ± 0.88%. Interestingly, the hydrolysates at DH ≤ 9.68 ± 0.45% could be an α-glucosidase activator instead. Two novel α-glucosidase inhibitory peptides with their sequences of Leu-Arg (287.2 Da) and Pro-Leu-Met-Leu-Pro (568.4 Da) were identified. Hydrophobic amino acids in the peptides, particularly Pro and Leu, contribute greatly to the α-GIA, while rich essential amino acids, branched chain amino acids, Pro and Met enlarged markedly the application in functional foods. The present research provided a green route for production of novel α-glucosidase inhibitory peptides as nutrient and functional food ingredients in the management of hyperglycaemia.