In food processing, enzymatic hydrolysis has become a revolutionary biotechnological instrument that provides consistency and sustainability that are unmatched by traditional techniques. This work thoroughly analyzes current developments in enzymatic hydrolysis and examines its uses in various food processing contexts. The biotechnological aspects—such as substrate specificity, enzyme engineering, and sustainable process optimization—are the main focus. The historical background and development of enzymatic hydrolysis in food processing are explored at the study's outset, highlighting the process's transformation from a specialized use to a critical component of contemporary biotechnological food production. A thorough literature review underscores the specificity of enzymes in dissolving various dietary components, offering insights into the biotechnological nuances controlling substrate-enzyme interactions. A careful examination of the many enzymes used in enzymatic hydrolysis and a full assessment of their uses and specificities are provided. Enzymatic hydrolysis selection criteria are outlined, taking regulatory compliance, thermostability, pH sensitivity, and substrate specificity into account. The integration of enzymatic hydrolysis into workflows for food processing is also covered, focusing on compatibility with current infrastructure and processing parameters. The case studies that demonstrate the effective use of enzymatic hydrolysis in various food production situations are the core of the research. These examples illustrate the adaptability and effectiveness of enzymatic processes in improving food quality, from developing gluten-free products to optimizing fermentation in baked goods. In its futuristic conclusion, the article imagines how enzymatic hydrolysis will continue to influence food processing in the years to come. The biotechnological viewpoint strongly emphasizes current research directions, such as integrating enzymatic processes into sustainable food production techniques and engineering enzymes for increased specificity. This biotechnological investigation highlights how enzymatic hydrolysis may completely change the food processing industry by providing accuracy, sustainability, and creativity in pursuing wholesome, nutrient-dense, and aesthetically pleasing food items.