The particular scale structure and mechanical properties of wool fiber make its associated fabrics prone to felting, seriously affecting the service life of wool products. Although the existing Chlorine–Hercosett treatment has a remarkable effect, it can lead to environmental pollution. Therefore, it is of great significance to develop an environmentally friendly and effective shrink-proof finishing technology. For this study, L-cysteine was mixed with protease to form a treatment solution system for shrink-proof finishing of wool fibers. The reduction performance of L-cysteine and its effect on wool were compared with those of other reagents, demonstrating that L-cysteine has an obvious reduction and destruction effect on the wool scale layer. Based on this, L-cysteine and protease 16L were mixed in a certain proportion to prepare an L-cysteine/protease treatment solution system (L/PTSS). The shrink-proof finishing of a wool top was carried out by the continuous multiple-padding method, and the processing parameters were optimized using the response surface method. The results indicated that when the concentrations of L-cysteine and protease 16L were 9 g/L and 1 g/L, respectively, the wool was padded five times at 50 °C, and each immersion time was 30 s, the felt ball density of the treated wool reduced from 135.86 kg/m3 to 48.65 kg/m3. The structure and properties of the treated wool were also characterized using SEM, TG, and tensile strength tests, which indicated that the fiber scale structure was stripped evenly. Meanwhile, the treated fibers still retained adequate thermal and mechanical properties, indicating suitable application value. XPS, FT-IR, Raman, UV absorbance, and other test results revealed the reaction mechanism of L/PTSS with the wool fibers. After L-cysteine rapidly reduced the disulfide bonds in wool, protease can hydrolyze peptide chains more effectively, causing the scale layer to gradually peel off. Compared with the chlorination method and other protease shrink-proof technologies, L/PTSS can achieve the finishing effect on wool rapidly and effectively, without causing excessive pollution to the environment. The conclusions of this study provide a foundation for the development and industrial application of biological enzyme shrink-proof finishing technology.