BACKGROUNDBacillus inaquosorum strains is widely recognized for their plant‐growth‐promoting and biocontrol capabilities, yet their roles in protease production remain unclear. The present study aimed to comprehensively assess the protease‐producing performance of B. inaquosorum strain E1‐8, at the same time as exploring the novel application of agricultural Bacillus proteases in the preparation of protein hydrolysates for fresh‐cut fruits preservation.RESULTSFirst, genomic sequencing revealed the diversity of E1‐8 proteases, indicating 15 putative extracellular proteases. Subsequently, the fermentation conditions for E1‐8 protease production were optimized, with sweet potato powder and soybean meal identified as the most suitable carbon and nitrogen sources, respectively, resulting in a maximum protease activity of 321.48 U mL−1. Upon culturing the strain under these optimized conditions, only an S8 family serine protease and an M48 family metalloprotease were revealed by secretomic analysis and protease inhibitor assays. Additionally, the optimal protease conditions for generating protein hydrolysates from soy, pea, fish and porcine proteins were determined. The molecular weight of the hydrolysates primarily ranged from 2000 to 180 Da, with a total of 17 amino acids identified. The application of these hydrolysates demonstrated a 2,2‐diphenyl‐1‐picrylhydrazyl (i.e. DPPH) scavenging activity ranging from 58.64% to 84.12%, significantly reducing of the melting peaks and the freezing points. Furthermore, the browning index of apple slices stored at 4 °C decreased by 14.81% to 22.15% on the second day, and similar effects were observed in fresh‐cut banana stored at 4 °C for 7 days.CONCLUSIONThe protein hydrolysates obtained exhibit remarkable antioxidant, antifreeze and anti‐browning properties for fresh‐cut fruits. © 2024 Society of Chemical Industry.