BackgroundAs the protein-laden by-product, red blood cells (RBCs) from poultry blood is a potential source of protein used as food and feed ingredient. However, RBC was currently underutilized. Therefore, it is an urgent need to develop feasible and cost-effective methods for converting poultry waste into nutritional and functional products.ResultsTo take full advantage of this poultry waste, peptide hydrolysate was produced by deep controllable bioconversion of RBC, by means of synergistic combination of neutrase and flavourzyme. In this work, the functional properties and antioxidant activity of peptide hydrolysate were also characterized. The degree of hydrolysis (DH) was optimized using response surface methodology, and optimal hydrolysis conditions were found to be: temperature 51 °C, substrate concentration 14% (w/v), initial pH 7.0, and time 7.5 h. The red blood cell hydrolysate (RBCH) obtained not only possessed plentiful small peptides (< 3 kDa, 68.14%), but also was abundant in essential amino acids, accounting for over 50% of total amino acids. In addition to its excellent solubility (> 80%), emulsifying and foaming properties, RBCH also exhibited notable antioxidant activities, such as DPPH (2,2-diphenyl− 1-picrylhydrazyl) radical-scavenging activity (IC50, 4.16 mg/mL), reducing power, metal chelating ability and inhibiting lipid peroxidation.ConclusionsRBCH enriched in small peptides has the potential to be a new food additive with outstanding functional and antioxidant properties, and a process was established for converting poultry waste into peptide hydrolysate using neutrase and flavourzyme.Electronic supplementary materialThe online version of this article (10.1186/s12896-018-0475-5) contains supplementary material, which is available to authorized users.