This research aimed to evaluate tilapia by-product powders as a novel food ingredient and the suitable cooking method for snack bar (SBs) production. Tilapia by-product powders were made by two processing methods; one powder was oven-dried as tilapia dry powder (TDP) and another was bromelain-hydrolyzed and then freeze-dried as tilapia hydrolysate powder (THP). SBs were prepared by incorporating tilapia dry powders (TDP or THP; 10%). SBs were further separated in two different cooking methods, namely unbaked and baked ones. The baked SBs had yellow and darker coloration (L* value ranged from 66.38 to 76.12) and more reddish color (a* value range from −1.26 to 1.06). Addition of tilapia by-product powders significantly (p < 0.05) increased the protein content of the original SB from 21.58 to 32.08% (SB + THP). Regarding DPPH scavenging activity, the control group showed the lowest activity, followed by SB + TDP and SB + THP with the highest activity (p < 0.05), with DPPH scavenging activity ranged from 12.40 to 26.04%. The baking process significantly (p < 0.05) increased the angiotensin converting enzyme (ACE) inhibitory activity of the SBs. In particular, the SB + THP group showed the highest activity (17.78%). All samples exhibited antibacterial activity against Staphylococcus aureus, and the SB + THP group showed the highest activity (15.08 ± 1.95 mm growth inhibition). Based on principal component analysis, four principal components (nutraceutical pigmentation, physical characteristics, nutrition value, and greater dehydration) were contributed towards the physicochemical and functional properties of the SBs. The overall results suggested that tilapia by-product powders can be potential ingredients for adding functional values to food products.