Fortification of ready-made food is preferred by most consumers with nutrient-enriched foods. High protein value like soybean is of great value, since soy can replace dairy proteins and meat. Therefore, this study aims to produce soybean protein hydrolysate using papain to improve its functional properties and to formulate fortified biscuits with soybean protein hydrolysate. Soybean protein isolate was prepared and hydrolyzed with papain. It was characterized by electrophoresis (SDS-PAGE) and degree of hydrolysis. Its functional properties and antioxidant activity were determined and fortified biscuits was formulated at levels (5,10 and 15%). Results of hydrolysate electrophoresis revealed the presence of low-molecular weight peptides (10.5, 13, 13.5, 24.5, 25.5, 27 kDa). The Degree of hydrolysis as α–amino groups was 29.9%. The detected hydrolysate antioxidant activity and functional properties were better than those of soybean flour and isolate. Both of water holding capacity (WHC), oil binding capacity (OBC) were decreased after hydrolysis of protein while, the emulsifying capacity (EC) of soybean was improved from 1.97±0.03 to 2.28±0.04 ml oil/g. Solubility index (SI) was increased to reach 56.9%. Foaming capacity was improved by increasing it from 0.93±0.01 to 5.93±0.07ml/g. The fortified biscuits recorded a good palatability at levels of 5 and 10% for all sensory characteristics. In conclusion, enzymatic hydrolysis of soybean protein improved its functional properties and produced bioactive peptides. Thus, the production of biscuits fortified by 10% soybean protein hydrolysate as a functional food is recommended.