Small peptides show higher antioxidant capacity than native proteins and may be absorbed in the intestine without further digestion. In our study, a protein by-product from rice starch industry was hydrolyzed with commercial proteolytic enzymes (Alcalase, Neutrase, Flavourzyme) and microbial whole cells of Bacillus spp. and the released peptides were tested for antioxidant activity. Among enzymes, Alcalase was the most performing, while microbial proteolytic activity was less efficient. Conversely, the antioxidant activity was higher in the samples obtained by microbial hydrolysis and particularly with Bacillus pumilus AG1. The sequences of low molecular weight antioxidant peptides were determined and analyzed for aminoacidic composition. The results obtained so far suggest that the hydrolytic treatment of this industrial by-product, with selected enzymes and microbial systems, can allow its exploitation for the production of functional additives and supplements rich in antioxidant peptides, to be used in new food formulas for human consumption.