This study aimed to stabilize and mask the bitterness of peptides obtained from the enzymatic hydrolysis of coconut‐meal protein with maltodextrin (MD) and maltodextrin‐pectin (MD‐P) as carriers via spray‐drying. Essential (~35%), hydrophobic (~32%), antioxidant (~15%), and bitter (~45%) amino acids comprised a significant fraction of the peptide composition (with a degree of hydrolysis of 33%). The results indicated that the peptide's production efficiency, physical and functional properties, and hygroscopicity improved after spray‐drying. Morphological features of free peptides (fragile and porous structures), spray‐dried with MD (wrinkled with indented structures), and MD‐P combination (relatively spherical particles with smooth surfaces) were influenced by the process type and feed composition. Adding free and microencapsulated peptides to the bread formula (2% W/W) caused changes in moisture content (35%–43%), water activity (0.89–0.94), textural properties (1–1.6 N), specific volume (5.5–6 cm3/g), porosity (18%–27%), and color indices of the fortified product. MD‐P encapsulated peptides in bread fortification resulted in thermal stability and increased antioxidant activity (DPPH and ABTS+ radical scavenging: 4.5%–39.4% and 31.6%–46.8%, respectively). MD‐P (as a carrier) could maintain sensory characteristics and mask the bitterness of peptides in the fortified bread. The results of this research can be used to produce functional food and diet formulations.