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The aim of the current study was to identify factors influencing the technological functionality of fermented bran. The influences of fermentation type and type of wheat bran on the microbial community, bioactivity, arabinoxylans (AX), and activity of xylanases were studied in the bran ferments. Furthermore, technological quality of ferments was established by using them to replace wheat in baking with a 20% substitution level. Solubilization of AX and endogenous xylanase activity of bran were influenced by the type of bran, fermentation type, and conditions. Peeled bran had a clearly reduced microbial load and different microbial community in comparison to native bran. Bran from peeled kernels contained 10‐fold lower activities of endogenous xylanases in comparison to native bran. Yeast fermentation of bran from peeled kernels increased the level of folates (+40%), free phenolic acids (+500%), and soluble AX (+60%). Bread containing yeast‐fermented peeled bran had improved volume (+10–15%) and crumb softness (25–35% softer) in comparison to unfermented counterparts. Solubilization of AX during the 20 hr fermentation and decreased endogenous xylanase activity are proposed as the main reasons for the improved technological functionality of fermented bran.