Protein glutaminase (PG; EC 3.5.1.44) is widely used in the food industry because it catalyzes the deamidation of peptide chain glutamine residues and enhances the functional properties of food proteins. Here, a strategy for PG production by probiotic Escherichia coli Nissle 1917 (EcN) is proposed. The yield of mature PG (mPG) was increased to 8.69 U/mL after testing a series of pSEVA vectors. The purified mPG showed significant deamidation activity against a wide range of protein substrates. Among these tested substrates, the functional properties of PG-modified casein were investigated. Deamidation of casein by PG was more effective at 60°C, pH = 7, and an enzyme-to-substrate ratio (E/S) of 5 U/g protein. Casein is deamidated up to 53.29%, which leads to a solubility of more than 90% for a 5% casein solution. Foam capacity can be nearly doubled. Emulsifiability, especially emulsification stability, is substantially improved. With increasing DD of casein, the α-helix and β-turn in the secondary structure of deamidated casein increased from 0–22.5%, and from 2.8–27.2% respectively, while β-fold and random decreased from 54.6–10.5%, and from 42.6–39.8% respectively. The enhancement of the absorbance values, endogenous fluorescence peaks, and surface hydrophobicity are due to the exposure of hydrophobic amino acids inside the tertiary structure of deamidated casein. Furthermore, deamidated casein particle size reduced while particle size homogeneity rose. After deamidation by PG, casein has achieved enhanced functional properties which improves its usability as a functional ingredient in the food industry.