Finding strategies to use the swim bladder of farmed totoaba (Totoaba macdonaldi) is of the utmost need to reduce waste. Fish swim bladders are rich in collagen; hence, extracting collagen is a promising alternative with benefits for aquaculture of totoaba and the environment. The elemental biochemical composition of totoaba swim bladders, including their proximate and amino acid compositions, was determined. Pepsin-soluble collagen (PSC) was used to extract collagen from swim bladders, and its characteristics were analyzed. Alcalase and papain were used for the preparation of collagen hydrolysates. Swim bladders contained 95% protein, 2.4% fat, and 0.8% ash (on a dry basis). The essential amino acid content was low, but the functional amino acid content was high. The PSC yield was high, at 68% (dry weight). The amino acid composition profile, electrophoretic pattern, and structural integrity analyses of the isolated collagen suggested it is a typical type-I collagen with high purity. The denaturalization temperature was 32.5 °C, probably attributable to the imino acid content (205 residues/1000 residues). Papain-hydrolysates (≤3 kDa) of this collagen exhibited higher radical scavenging activity than Alcalase-hydrolysates. The swim bladder from the farmed totoaba could be an ideal source to produce high-quality type I collagen and may be considered an alternative to conventional collagen sources or bioactive peptides.