Yoghurt strain Lactobacillus LBL-4 cultivated for 8–10 h at pH ~6.0 was investigated as a considerable food-grade source of intracellular aminopeptidase. Cell-free extract manifesting >200 AP U/l was obtained from cells harvested from 1 L culture media. Subtilisin-induced hydrolysates of casein, soybean isolate, and Scenedesmus cell protein with degree of hydrolysis 20–22% incubated at 45°C for 10 h by 10 AP U/g peptides caused an enlarging of DH up to 40–42%, 46–48%, and 38–40% respectively. The DH increased rapidly during the first 4 h, but gel chromatography studies on BioGel P-2 showed significant changes occurred during 4–10 h of enzyme action when the DH increased gradually. After the digestion, the remained AP activity can be recovered by ultrafiltration (yield 40–50%). Scenedesmus protein hydrolysate with DH 20% was inoculated by Lactobacillus LBL-4 cells, and after 72 h cultivation the DH reached 32%. The protein hydrolysates (DH above 40%) obtained from casein and soybean isolate (high Q value) demonstrated a negligible bitterness while Scenedesmus protein hydrolysates (low Q value) after both treatments were free of bitterness.