This study investigated the physicochemical characteristics of potato protein isolate hydrolysate (PPIH) and its antioxidant activity. Potato protein isolate (PPI) was hydrolyzed into PPIH by the proteases bromelain, Neutrase, and Flavourzyme. Compared with PPI, the resulting PPIH had a lower molecular weight (MW, from 103.5 to 422.7 Da) and smaller particle size (<50 nm), as well as a higher solubility rate (>70%) under acidic conditions (pH 3–6). PPIH presented good solubility (73%) across the tested pH range of 3–6. As the pH was increased, the zeta potential of PPIH decreased from −7.4 to −21.6. Using the 2,2′-azino-bis-3-ethylbenzthiazoline-6-sulfonic acid (ABTS) radical-scavenging assay, we determined that the half-maximal effective concentration (EC50) values of ascorbic acid, PPIH, and PPI were 0.01, 0.89, and >2.33 mg/mL, respectively. Furthermore, PPIH (50 μg/mL) protected C2C12 cells from H2O2 oxidation significantly better than PPI (10.5% higher viability rate; p < 0.01). These findings demonstrated the possible use of PPIH as an antioxidant in medical applications.