Enzyme‐assisted extraction (EAE) of oils/fats involves the disruption of the cell wall of source material using enzymes to facilitate the release of oil. When proteases are used as the enzyme, EAE ends in the extracted oil as well as the protein hydrolysates. Herein, the EAE (using a commercial protease, Alcalase) was exploited to obtain fat and protein hydrolysates from chicken skin. Degree of hydrolysis (DH, the percentage ratio of cleaved peptide bonds), which showed a logarithmic correlation with the reaction time, was found to affect the properties of the products. As the DH increased, the peptide chain length of protein hydrolysates decreased which was confirmed by SDS‐PAGE analysis. With the increase of DH, the emulsifying activity index, foaming capacity, and oil holding capacity of the hydrolysates decreased but the solubility and emulsion stability index increased (p < 0.05). The DPPH free radical scavenging activity of the hydrolysates increased with the DH up to DH = 39.62% but decreased thereafter (p < 0.05). EAE resulted in a rise in fat yield and the fat contained a higher amount of unsaponifiables and lower free fatty acids (FFA) content, as compared to the control treatment (No enzyme, 80°C, 2 h, p < 0.05). DH affected the fat yield and the unsaponifiables content of the fat, positively (p < 0.05). However, it did not affect the fat FFA content and iodine value (p > 0.05). Results obtained here showed DH can be used as an effective measure for controlling the physicochemical and functional properties of chicken skin protein hydrolysates and fat in the EAE process.