In the present study, the effect of enzymatic hydrolysis on the antioxidant activity of three red seaweeds (Chondria cornuta, Chondria dasyphylla, and Murrayella periclados) and two green seaweeds (Cladophora sp. and Ulva lactuca) from the Kuwait coast were evaluated. The seaweeds were hydrolyzed with five carbohydrases and three proteases, and the resulting extracts were tested for antioxidant activity. The total phenolic content and yield of the extracts varied greatly depending upon the species and enzyme used for hydrolysis. Of the 40 enzymatic extracts screened for antioxidant activity, the Viscozyme and Alcalase extracts of M. periclados, Neutrase and Ultraflo extracts of Cladophora sp., and Neutrase extracts of C. cornuta had high antioxidant activity compared to other enzymatic extracts in various in vitro assays. Fractionation of the extracts revealed that the radical scavenging and reducing power of the extracts were mainly due to phenolic fractions. In contrast, the iron‐chelating ability was mainly due to protein fractions. The level of prevention of lipid oxidation in the liposome model system varied for different fractions of extracts and did not correlate with total phenolic content and other antioxidant properties. The results of the study show that, by hydrolyzing seaweeds with specific enzymes, customized seaweed extracts with specific bioactivity could be obtained.