Alginate, an important acidic polysaccharide in marine multicellular algae, has attracted attention as a promising biomass resource for the production of medical and agricultural chemicals. Alginate lyase is critical for saccharification and utilization of alginate. Discovering appropriate and efficient enzymes for depolymerizing alginate into fermentable fractions plays a vital role in alginate commercial exploitation. Herein, a unique alginate lyase, AlgSH7, belonging to polysaccharide lyase 7 family is purified and characterized from an alginate-utilizing bacterium Microbulbifer sp. SH-1. The purified AlgSH7 shows a specific activity of 12,908.26 U/mg, and its molecular weight is approximately 66.4 kDa. The optimal temperature and pH of AlgSH7 are 40 °C and pH 9.0, respectively. The enzyme exhibits stability at temperatures below 30 °C and within an extensive pH range of 5.0–9.0. Metal ions including Na+, K+, Al3+, and Fe3+ considerably enhance the activity of the enzyme. AlgSH7 displays a preference for poly-mannuronic acid (polyM) and a very low activity towards poly-guluronic acid (polyG). TLC and ESI-MS analysis indicated that the enzymatic hydrolysates mainly include disaccharides, trisaccharides, and tetrasaccharides. Noteworthy, the alginate oligosaccharides (AOS) prepared by AlgSH7 have an eliciting activity against chilling stress in Chinese flowering cabbage (Brassica parachinensis L.). These results suggest that AlgSH7 has a great potential to design an effective process for the production of alginate oligomers for agricultural applications.