The goal of the current work was to optimize the growth parameters needed to manufacture agarase enzyme from a non-marine PI strain of Bacillus subtilis on an agar-based medium. Using Plackett–Burman design (PBD), nine process parameters were evaluated, and agar, peptone, and yeast-extract were identified as the most significant independent factors influencing agarase production with confidence levels more than 90%. To evaluate the optimal concentrations of the indicated process parameters on agarase production, the Box–Behnken design (BBD) was applied. After optimization, B. subtilis strain PI produced 119.8 U/ml of agarase, representing a 1.36-fold increase. In addition the agar hydrolysate fermented products contain the liberated oligosaccharide acts as strong antioxidant which has 62.4% scavenging activity. Also, the agarase yields increased (1141.12, 1350.253, 1684.854 and 1921.863 U/ml) after substitution the agar with algal biomass of Carolina officinalis at different concentrations (2, 5, 10 and 15%), respectively. After completing the saccharification process, the resulted hydrolysate was used to produce ethanol through fermentation with Pichia pastoris yeast strain as an economical method giving yields (6.68317, 7.09748, 7.75648 and 8.22332 mg/ml), that are higher than using yeast extract peptone dextrose (YPD) medium (4.461 mg/ml).