Abstract: Cottonseed meal (CSM) is one of the major protein by-products in the cotton industry. But there is limited nutritional value for monogastric animals, due to the anti-nutritional factors, an imbalanced amino acid profile, and complex protein structures that hinder digestibility. Enzymatic hydrolysis can represent a promising biological strategy to break down these complex proteins into more bioavailable peptides and amino acids, thereby enhancing the overall nutritional quality of CSM. The objective of this study was to systematically optimize the enzymatic hydrolysis of CSM using the Response Surface method (RSM). Nutritionally valuable small peptides were produced to evaluate the protein structure and function properties. The hydrolysis process also employed a commercial alkaline protease derived from Bacillus spp. A single-factor experimentation was conducted to determine the functional ranges. A four-factor, three-level Box-Behnken Design (BBD) was implemented after evaluation. The independent variables were selected as the enzyme dosage (%), hydrolysis temperature (℃), hydrolysis duration (h), and substrate moisture content (%), with the yield of small peptides as the response variable. The experimental data (29 runs) was were fitted for the quadratic polynomial regression. Analysis of Variance (ANOVA) was used to assess the statistical significance of the model terms and their interactions. Enzymatically Hydrolyzed Cottonseed Meal (EHCSM) was subjected to characterization after the theoretical prediction and experimental validation of the optimal parameters. The nutritional profile was obtained via free amino acid analysis; Antioxidant functionality was quantified using the DPPH radical scavenging assay; Microstructural evolution was visualized using Scanning Electron Microscopy (SEM); Space conformation of protein secondary structure was deconvoluted using Fourier Transform Infrared Spectroscopy (FTIR); And the distribution of molecular weight was determined via Gel Permeation Chromatography (GPC). Statistical analysis demonstrated that the regression model was highly significant (P < 0001) with a high coefficient of determination (R² = 0.9807), indicating the high accuracy of prediction. The optimal hydrolysis parameters were established as follows: enzyme dosage 1.41%, temperature 35.10 ℃, time 71.9 h, and moisture content 35.5%. The validation experiments yielded a small peptide content of 20.11%, indicating the robust reliability. The comparison between native CSM and EHCSM also revealed the physicochemical transformations. Nutritional assessment showed a 128.39% increase in total free amino acids, with statistically significant enrichment of limiting essential amino acids, specifically lysine and methionine. Functionally, the EHCSM exhibited a 296.73% enhancement in the DPPH radical scavenging capacity, indicating the release of antioxidant peptides. FTIR analysis indicated that there was a significant conformational reorganization at the molecular level. The β- sheet to α-helix peak area ratio was reduced from 1.77 to 0.78, indicating a transition from the ordered rigidity to the structural flexibility. GPC analysis showed that the extensive proteolysis was reduced the weight-average molecular weight (Mw) from 1921 to 870 Da. The distribution was shifted toward the 200–800 Da range, which was correlated with optimal intestinal absorption. The SEM imaging revealed that the dense and compact matrix of native CSM was degraded into a porous and eroded microstructure. An effective RSM was used to optimize the enzymatic hydrolysis of cottonseed meal. The optimal protocol was significantly upgraded the nutritional quality of CSM. The amino acid was balanced to enrich the concentration of bioavailable small peptides and free amino acids. Furthermore, the structural modifications—specifically the reduction of molecular weight and the unfolding of protein secondary structures—were collectively contributed to the digestibility and functional antioxidant capacity. These findings can provide a robust theoretical foundation and precise technical parameters for the industrial application of enzymatic hydrolysis. The strategy can be expected to convert agricultural by-products into high-value functional feed ingredients.