The effects of limited enzymatic hydrolysis by Alcalase on the conformational and functional properties of peanut (Arachis hypogaea L.) protein isolate (PPI) were investigated. Acid subunits of arachin were most susceptible to Alcalase hydrolysis, followed by conarachin and the basic subunits of arachin. Enzymatic hydrolysis increased the thermal stability of arachin and led to a sharp increase in the number of disulphide bonds with a decrease of the sulphydryl group in PPI hydrolysates in comparison with PPI. The analysis of intrinsic fluorescence spectra indicated a more moveable tertiary conformation of PPI hydrolysates than PPI. The limited emzymatic hydrolysis improved the functional properties of PPI, such as protein solubility and gel-forming ability, but impaired the emulsifying activity index.