BACKGROUNDMulberry leaves (MLs) are widely used in food because of their nutritional and functional characteristics. However, plant cell walls and natural bitterness influence nutrient release and the flavor properties of MLs. Liquid‐state fermentation using Monascus purpureus (LFMP) is a common processing method used to improve food properties. The present study used headspace solid‐phase micro extraction gas chromatography‐mass spectrometry (HS‐SPME‐GC‐MS) and non‐targeted metabolomics to examine changes in volatile and non‐volatile metabolites in MLs. The transformation mechanism of LFMP was investigated by microscopic observation and dynamic analysis of enzyme activity, and changes in the biological activity of MLs were analyzed.RESULTSLFMP significantly increased total phenolics, total flavonoids, free amino acids and soluble sugars in MLs, at the same time as decreasing phytic acid levels. In total, 92 volatile organic compounds (VOCs) were identified and quantified. VOCs such as (2R,3R)‐(–)‐2,3‐butanediol, terpineol and eugenol showed some improvement in the flavour characteristics of MLs. By using non‐targeted metabolomics, 124 unique metabolites in total were examined. LFMP altered the metabolic profile of MLs, mainly in plant secondary metabolism, lipid metabolism and amino acid metabolism. Microscopic observation and dynamic analysis of enzyme activity indicated that LFMP promoted cell wall degradation and biotransformation of MLs. In addition, LFMP significantly increased the angiotensin I‐converting enzyme and α‐glucosidase inhibitory activity of MLs.CONCLUSIONLFMP altered the flavour characteristics, metabolite profile and biological activity of MLs. These findings will provide ideas for the processing of MLs into functional foods. In addition, they also provide useful information for biochemical studies of fermented MLs. © 2023 Society of Chemical Industry.