A huge production of fish and their processing waste give rise to by-products comprises up to 70% depending on the species, size and processing method. The waste includes visceral parts, head, frames, bones, skin and cut-offs are rich source of protein with high functional properties. It is generally discarded which is a wastage of nutrient source and leading to environmental issues. Therefore, it was aimed to utilized the by-products for maximum recovery of nutrients by enzyme hydrolysis method for the preparation of protein hydrolysate with the used of papain and pepsin for digestion following different hydrolysis conditions. With the hydrolysis of papain enzyme (1 to 6%), the protein content of finfish waste protein hydrolysate ranges from 19.17% ± 0.06 to 73.14% ± 0.08 and that of shellfish waste protein hydrolysate prepared with 5,10 and 15% papain enzyme showed 26.73% ± 0.04 to 40.4% ± 0.5 which is comparatively low. Whereas the highest protein content was observed in 1% pepsin enzyme treated finfish waste protein hydrolysate with 80.55% ± 0.07. Besides, the hydrolysates were composed of 6.91% ± 0.05 to 10.46% ± 0.05 (moisture content), 0.6% ± 0.01 to 2.4% ± 0.01 (ash content) and 0.02% ± 0.005 to 0.09% ± 0.005 (fat content). The hydrolysates were highly soluble ranges from 72.73% ± 0.05 to 93.83% ± 0.1 which indicates development of small size hydrophilic with highly solvated polypeptide particles. A reduced phenomena of foaming capacity and stability were observed in shellfish waste protein hydrolysate in contrast with finfish waste protein hydrolysate. Similar pattern was also resulted in emulsifying stability index. Whereas the emulsifying activity index was in the range of 6.15 ± 0.03 to 9.85 ± 0.07 m2/g. The water holding capacity of finfish and shellfish waste protein hydrolysate ranges from 3.4 to 4.23 gm/gm hydrolysate and 1.53 to 1.63 gm/gm hydrolysate respectively which is resulted by the difference in molecular weight of the peptide. The hydrolysates extracted from different sample with different enzyme and concentration at varying conditions were more or less similar ranges from 3.7 to 4.1 gm/gm protein hydrolysate (oil holding capacity). Hence, high protein content with good functional properties of the protein hydrolysate prepared with the utilization of fish waste is a positive impact on the attempt made to recover nutrient by enzymatic hydrolysis.