Collagen is considered to be an intercellular adhesive that prevents tissue stretching or damage. It is widely utilized in cosmetic skin solutions, drug delivery, vitreous substitutions, 3D cell cultures, and surgery. In this study, we report the development of a green technology for manufacturing collagen peptides from flatfish skin using ultrasound and enzymatic treatment and a subsequent assessment on skin functionality. First, flatfish skin was extracted using ultrasound in distilled water (DW) for 6 h at 80 °C. Molecular weight analysis via high-performance liquid chromatography (HPLC) after treatment with industrial enzymes (alcalase, papain, protamex, and flavourzyme) showed that the smallest molecular weight (3.56 kDa) was achieved by adding papain (0.5% for 2 h). To determine functionality based on peptide molecular weight, two fractions of 1100 Da and 468 Da were obtained through separation using Sephadex™ G-10. We evaluated the effects of these peptides on protection against oxidative stress in human keratinocytes (HaCaT) cells, inhibition of MMP-1 expression in human dermal fibroblast (HDF) cells, reduction in melanin content, and the inhibition of tyrosinase enzyme activity in murine melanoma (B16F10) cells. These results demonstrate that the isolated low-molecular-weight peptides exhibit superior skin anti-oxidant, anti-wrinkle, and whitening properties.